Vikas started business with a cash of Rs. 22,000 and stock of Rs. 3,000 on 1st Jan., 2014.During the year, he made a profit of Rs.6,000.His creditors were paid Rs.4,500 for Office furniture supplied. He tool goods worth Rs.3,500 for his daughter's wedding on 30th June,2014.The gross assets of his business on 31st Dec.,2014 is _____________.

Rs. 27,500

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Rs. 26,500

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Rs. 23,500

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Rs. 20,500

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Solution

The correct option is B Rs. 27,500
Vikas's started business with Cash Rs.22000 and Stock of Rs.3000. His initial contribution to the capital will be Rs.25000 (Rs.22000 + Rs. 3000).

Calculation at the end of the year will be :

Capital introduced Rs.25000
Add; Profit during the year Rs. 6000
----------------
Rs.31000
Less: Drawings (Goods) Rs.3500
-----------------
Capital at the end of the year Rs.27500
-----------------
Therefore, Gross Assets of the business as on 31st Dec 2014 will be Rs.27500.

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