Question

If the opening capital is Rs. 80,000, closing capital is Rs. 1,80,000, withdrawals are Rs. 10,000 and additional capital brought in is Rs. 20,000, the profit will be Rs. ______________.

a. 90,000

b. 1,10,000

c. 70,000

d. 1,50,000

Answer 1

If the opening capital is Rs. 80,000, closing capital is Rs. 1,80,000, withdrawals are Rs. 10,000 and additional capital brought in is Rs. 20,000, the profit will be Rs. 90,000
Explanation:

The calculation of profit is presented below.

Profit=Closing Capital + Drawings −(Additional Capital Introduced + Opening Capital)=1,80,000 + 10,000-(80,000 + 20,000)=Rs 90,000">Profit = Closing Capital + Drawings −(Additional Capital Introduced + Opening Capital)

Profit=Closing Capital + Drawings −(Additional Capital Introduced + Opening Capital)=1,80,000 + 10,000-(80,000 + 20,000)=Rs 90,000">= 1,80,000 + 10,000−(80,000 + 20,000)

Profit=Closing Capital + Drawings −(Additional Capital Introduced + Opening Capital)=1,80,000 + 10,000-(80,000 + 20,000)=Rs 90,000">= Rs 90,000