Question

Rishant keeps incomplete records of his business. He gives you the following information; capital at the beginning of the year Rs. 8,00,000; capital at the end of the year Rs. 6,20,000, Rs. 2,50,000 was withdrawn by him for his personal use; as Rishant needed money for expansion of his business, he asked his wife for help, his wife allowed him to sell her ornaments and invest that amount into the business which comes to Rs. 30,000.

You are required to calculate profit or loss made during the year.

Answer 1

$\text{Statement Showing Profit or Loss}\text{for the year ended..........}\begin{array}{cc}\text{Particulars}& \text{Amt (Rs.)}\\ \text{Capital at the End}& 6,20,000\\ \text{(+) Drawings}& \underset{–}{2,50,000}\\ & 8,70,000\\ \text{(-) Additional Capital Introduced}& 30,000\\ \text{Adjusted Capital at the End}& \overline{8,40,000}\\ \text{(-)Capital in the Beginning}& \underset{–}{8,00,000}\\ \text{Profit Made During the Year}& \underset{–}{\underset{–}{40,000}}\\ & \end{array}$