Question

A commenced his cloth business on 1st April, 2017 with a capital of Rs. 30,000. On 31st March 2018, 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
Profit = Closing Capital – Opening Capital 

= Rs.40,000 – Rs.30,000 = Rs.10,000