X commenced business on 1st April,2016 with a capital of Rs.6,00,000. on 31st March,2017 his assets were Rs.8,00,000 and liabilities Rs.50,000. Find out his profit or loss made by him on 31st March,2017
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Answer:
Profit = Rs. 50,000
Explanation:
Capital + Liabilites = Assets
Capital +Profit / (Loss) + Liabilites = Assets
600000+Profit / (Loss) +50000 = 800000
Profit / (Loss) = 800000-600000-50000
Profit = 50,000
As its Positve I have taken it as Profit, If its Negative considered it as Loss
Profit is added to Capital
Loss is deducted from Capital
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