Question

Capital introduced in the beginning of the year by Ram is Rs. $40,000$. Further capital introduced during the year Rs. $1000$. Drawings for the year is Rs. $200$ per month and Closing capital is Rs. $53,600$. Determine the profit/loss for the year ended?

• A. Rs. $15,000$ profit
• B. Rs. $5,000$ Loss
• C. Rs. $20,000$ Profit
• D. Can't say

Answer 1

The correct option is A Rs. $15,000$ profit

To determine the profit/loss for the year ended :

Closing Capital at the end of the year = 53600

Less: Capital in the beginning (40000)

Less: Additional capital (1000) = 12600

Add: Drawings for the year 2400(200*12) =15000