CMA Intermediate · Financial Accounting · Financial Statements from Incomplete Records
Opening capital of Ramesh Traders was ₹4,00,000 and closing capital was ₹5,10,000. During the year Ramesh withdrew ₹60,000 for personal use, introduced fresh capital of ₹40,000, and the closing figure had not yet been adjusted for depreciation of ₹15,000 on furniture. What is the profit for the year after the depreciation adjustment?
Profit is ₹1,15,000. Closing capital is first reduced by unrecorded depreciation of ₹15,000 to ₹4,95,000, giving an increase of ₹95,000. Adding drawings of ₹60,000 and deducting fresh capital of ₹40,000 gives the profit for the year.
- A₹1,15,000Correct
- B₹1,30,000
- C₹1,45,000
- D₹95,000
Explanation
Adjusted closing capital = 5,10,000 - 15,000 = 4,95,000. Increase = 95,000. Profit = 95,000 + 60,000 drawings - 40,000 capital introduced = 1,15,000. Ignoring depreciation gives 1,30,000.
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