Question 30 of 50
Q.
From the following particulars ascertain profit or loss.
| Particulars | ₹ |
|---|---|
| Capital as on 1st January 2021 | 2,60,000 |
| Capital as on 31st December 2021 | 3,60,000 |
| Additional Capital introduced during the year | 20,000 |
| Drawings made during the year | 50,000 |
Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2023Subjective· 2mImportance★★★★★
60% · 30/50 Questions
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Start your 14-day free trial to unlock the full solution →By comparing opening and closing capital after adjusting drawings and additional capital, the business earned a profit of ₹1,30,000.
Concept
Under incomplete records, profit or loss is found by the capital comparison method. The idea is that profit increases capital, while drawings reduce it and fresh capital adds to it (but is not profit). So we adjust the change in capital for these items.
Formula
Profit / (Loss) = Closing Capital + Drawings − Additional Capital − Opening Capital
Computation
| Particulars | ₹ |
|---|---|
| Closing capital (31.12.2021) | 3,60,000 |
| Add: Drawings during the year | 50,000 |
| 4,10,000 | |
| Less: Additional capital introduced | 20,000 |
| 3,90,000 | |
| Less: Opening capital (1.1.2021) | 2,60,000 |
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