Question

A had a capital of ₹ 125,000 on 1st April, 2018. He had also goods amounting to ₹ 45,000

which he had purchased on credit and the payment had not been made. Find out the value of
the total assets of the business.
(b) After a period of one month, he came to know that he had suffered a loss of ₹ 3,700. He
withdrew ₹ 1800 for his personal use. Find out his capital and assets of the business.

Answer 1

Answer and Explanation:

The computation is shown below:

a. Total assets is

= Capital + creditors

= 125,000 + 45,000

= 170,000

b. The ending capital is

= Capital - loss - drawings

= 170,000 - 3,700 - 1,800

= 164,500

The assets is

= Ending capital + creditors

= 164,500 + 45,000

= 209,500

The same should be considered