Question

Given information:

Capital at the end= $Rs.7,000$
Capital introduced = $Rs.5,000$
Drawings= $Rs.8,000$
Loss= $Rs.10,000$
With the above information, capital in the beginning is equal to ___________.

• A. $Rs.12,000$
• B. $Rs.16,000$
• C. $Rs.20,000$
• D. $Rs.30,000$

Answer 1

The correct option is C $Rs.20,000$

Solution to the given problem can be given through the below equation:

Opening Capital + Capital Introduced + Profit - Drawings = Closing Capital

By putting the information:

Opening Capital + Rs.5000 - Rs.10000 (Loss) - Rs.8000 = Rs.7000

Opening Capital - Rs.13000 = Rs.7000

Opening Capital = Rs.7000 + Rs.13000

Opening Capital = Rs.20000