Question

XYZ Associates in not maintaining full-fledged accounts on double entry system basis. From the following details estimate the profit made by XYZ Associates during $2013-14$ _____________.
Capital as on $1-4-2013$ Rs. $80,000$
Capital added during the year Rs. $20,000$
Drawing during the year Rs. $35,000$
Capital as on $31-3-2014$ Rs. $1,25,000$.

• A. Rs. $50,000$
• B. Rs. $60,000$
• C. Rs. $75,000$
• D. Rs. $45,000$

Answer 1

The correct option is B Rs. $60,000$

in case when business is not maintaining the full fledged accounts, profits are calculated on the basis of comparing the capital at the beginning of the year and capital at the end of the year.

Capital as on 01-04-2013 Rs.80000

Add: Addition during the year Rs.20000

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Rs.100000

Less: Drawing during the year Rs. 35000

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Balance Rs.65000

Capital as on 31-03-2014 Rs.125000

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Profits during the year Rs.60000

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