Question

Given information:
Opening capital: $Rs.5,000$
Closing capital : $Rs.6,000$
Drawings : $Rs.1,000$
New capital invested : $Rs.500$
The profit for the year will be _____________.

• A. $Rs.2,000$
• B. $Rs.1,500$
• C. $Rs.1,000$
• D. $Rs.500$

Answer 1

Answer: (B)

$Rs.1,500$

The solution to the given problem can be found out through below equation:

Opening Capital

Add: Capital Invested during the year

Add: Profits during the year

------------------------------

Less: Drawings during the year

------------------------------

Balance - Closing Capital at the end

therefore,

Rs.5000 + Rs.500 + Profit - Rs.1000 = Rs.6000

Rs.5500 + Profit - Rs.1000 = Rs.6000

Rs.4500 + Profit = Rs.6000

Profit of the year = Rs.6000 - Rs.4500

Profit = Rs.1500