A person started business with a cash of Rs. 22,000 and stock of Rs. 3,000 on 1st January, 1996. During the year he made a profit of Rs. 6,000. His creditors were paid Rs. 4,500 for the office furniture supplied. He took goods worth Rs. 3,500 for his daughter's wedding on 30th June, 1996. The gross assets of his business on 31st December, 1996 was _________.

Rs. 27,500

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Rs. 26,500

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Rs. 23,500

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Rs. 20,500

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Solution

The correct option is B Rs. 27,500
When accounts are not maintained on dual system of accounting, Profits can be determined by comparing the opening capital and closing capital.
Opening capital as on 1st Jan 1996 :
Cash Rs.22000
Stock Rs.3000
-------------
Total Rs.25000
Add: Profit during the year Rs. 6000
----------------
Rs.31000
Less: Drawings Rs. 3500
--------------
Closing Capital Rs.27500
---------------

As we know , assets and liabilities are equal when we make the balance sheet. Hence Gross assets are Rs.27500

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