PRC-1 · Chapter 10 · Question 47 of 100
A business has opening capital of Rs. 100,000, closing capital of Rs. 150,000, and drawings during the year of Rs. 20,000. Assuming no fresh capital was introduced, what was the net profit for the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 70,000
Explanation
Closing Capital = Opening Capital + Net Profit - Drawings. 150,000 = 100,000 + Net Profit - 20,000. Net Profit = 150,000 - 100,000 + 20,000 = Rs. 70,000.
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