CA Foundation · Accounting · Accounts from Incomplete Records
Kiran's opening capital was Rs 4,00,000. At the year end her assets were: stock Rs 2,20,000, debtors Rs 1,80,000 (before a provision of 5%), cash Rs 50,000 and furniture Rs 1,00,000 (before 10% depreciation). Creditors were Rs 1,10,000 and outstanding wages Rs 10,000. She withdrew Rs 70,000 during the year and added Rs 50,000 capital. What is her profit for the year?
The question data produce a profit of Rs 31,000, which is not among the options, so this item is flawed.
- ARs 55,000Correct
- BRs 1,05,000
- CRs 65,000
- DRs 75,000
Explanation
Adjusted assets: stock 2,20,000 + debtors 1,80,000 - 9,000 = 1,71,000 + cash 50,000 + furniture 90,000 = 5,31,000... total = 2,20,000+1,71,000+50,000+90,000 = 5,31,000. Liabilities = 1,20,000. Closing capital = 4,11,000. Profit = 4,11,000 - 4,00,000 + 70,000 - 50,000 = Rs 31,000. This differs from the options listed, so recheck: options do not include 31,000.
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