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Question
Mohan started a business on 1st April, 2017 with a capital of ₹ 25,000 and a loan of ₹ 12,500 borrowed from Shyam. During 2017-18 he had introduced additional capital of 12,500 and had withdrawn ₹ 7,500 for personal use. On 31st March, 2018 his assets were ₹ 75,000. Find out his capital as on 31st March, 2018 and profit made or loss incurred during the year 2017-18.
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Solution
Capital on March 31, 2018 = Assets − Loan from Shyam
= 75,000 − 12,500 = Rs 62,500
Profit (or Loss) during the year 2017-18 = Capital on March 31, 2018+ Drawings − (Additional Capital + Capital on April 01, 2017)
= 62,500 + 7,500 − (12,500 + 25,000)
= 70,000 − 37,500 = Rs 32,500
Capital on March 31, 2018 = Assets − Loan from Shyam
= 75,000 − 12,500 = Rs 62,500
Profit (or Loss) during the year 2017-18 = Capital on March 31, 2018+ Drawings − (Additional Capital + Capital on April 01, 2017)
= 62,500 + 7,500 − (12,500 + 25,000)
= 70,000 − 37,500 = Rs 32,500
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