Question

Mohan started a business on 1st April, 2017 with a capital of Rs. 25,000 and a loan of Rs. 12,500 borrowed from Shyam. During 2017-18 he had introduced additional capital of Rs. 12,500 and had withdrawn Rs. 7,500 for personal use. On 31st March, 2018 his assets were Rs. 75,000. Find out his capital as on 31st March, 2018 and profit made or loss incurred during the year 2017-18.

Answer 1

Mohan Started the Business Capital on 31st March 2018 

= Assets – Loan from Shyam 

= Rs.75,000 – Rs.12,500 = Rs.62,500 Profit (or Loss) during the year 2017 – 18 

= Capital on March 31, 2018 + Drawings – (Capital on April 01,2017 + Additional Capital) 

= Rs. 62,500 + Rs. 7,500 – (Rs. 25,000 + Rs. 12,500) 

= Rs.70,000 – Rs.37,500 = Rs.32,500