Question

A commenced his cloth business on 1st April, 2018 with a capital of ₩30,000. On 31st March 2019, his assets were worth ₩50,000 and liabilities of ₩10,000. Find out his closing capital and profits earned during the year.

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Answer 1

Answer:

Profits = ₩10,000

Closing Capital = ₩40,000

Explanation:

Let's note down the given information at first.

• Opening capital = ₩30,000
• Worth of assests after 1 year = ₩50,000
• Liabilities = ₩10,000

Now,

Profits

= (Worth of assets after 1 year - Liabilities)  - Opening capital

= (₩50,000 - ₩10,000) - ₩30,000

= ₩10,000

Next, let's find the closing capital

= Assets - Liabilities

Assets                ₩50,000

Liabilities              ₩10,000

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Closing capital      ₩40,000

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