Question

A commenced his cloth business on 1 April 2014 with a capital of Rs.30,000. On 31 March 2015, his assets were worth Rs.50,000 and liabilities of Rs.10,000. Find out his closing capital and profits earned during the year.

Answer 1

Closing capital = Assets - Liabilities

= Rs.50,000 - Rs.10,000

= Rs.40,000