Question

If capital at the end of the year is Rs. $7,000$, capital introduced during the year is Rs. $5,000$, drawing during the year are Rs. $8,000$, loss incurred during the year is Rs. $10,000$, then capital in the beginning would be equal to.

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

Answer 1

Answer: (C)

Rs. $20,000$

This can be formulated as:-

Op Capital+Capital Introduced+Profit-Drawings=Capital at the end

Op Capital+Rs.5000-Rs.10000-Rs.8000=Rs.7000

Op Capital-Rs.13000=Rs.7000

Opening Capital= Rs.7000+Rs.13000

Opening Capital = Rs.20000.