Question

X commenced business on 1st April 2017 with a capital of 600000. on 31st march 2018 his assets were worth rs 800000 and liabilities rs 50000. find out the closing capital and profit earn during the year?

Answer 1

Given

Assets on year end = 800000

Capital on year beginning = 600000

Liabilities on year end = 50000

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closing capital = assets on year end - liabilities on year end

                        = 800000  - 50000

                        = 7,50,000

Closing capital = 750000

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Closing capital = Opening capital + profit  

 7,50,000         = 600000 + Profit

Profit              = 750000 - 600000

                    = 150000

Profit earn during the year is 1,50,000

Answer 2

Assets as on 31-3-2018 (closing date) = 800000

Liabilities as on 31-3-2018(closing date) = 50000

Capital as on 1-4-17 = opening capital= 600000

we know that assets = Capital + Liabilities

so assets - Liabilities = Capital

800000 - 50000 = capital

750000 = capital (closing date)


we know that

opening capital + Profit = closing capital

600000 + profit = 750000

profit = 750000 - 600000 = 150000


So the closing capital= 750000 , profit= 150000