Question

Given that:

Capital at the end : $Rs.70,000$
Capital introduced : $Rs.50,000$
Drawings : $Rs.80,000$
Loss : $Rs.1,00,000$

Find capital in the beginning:

• A. $Rs.1,20,000$
• B. $Rs.1,60,000$
• C. $Rs.2,00,000$
• D. $Rs.3,00,000$

Answer 1

The correct option is C $Rs.2,00,000$

In case there is no double entry system is followed, profit can be calculated by comparing the opening and closing capital. In the given situation this can be calculated as:

Opening Capital Rs.xxxx

Add: Capital Introduced Rs.50000

Add: Profit for the year Rs. NIL

Less: Loss for the year Rs.100000

Less: Drawings Rs. 80000

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Capital at the end of the year Rs. 70000

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Opening Capital= Closing Capital+Drawings +Loss for the year-Capital intriduced

=Rs.70000+Rs.80000+Rs.100000-Rs.50000

Opening Capital= Rs.200000.