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A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss?
Most Upvoted Answer
A firm had a Capital Balance of 1,00,000 at the beginning of a year. A...
Capital in the beginning = 100,000
Capital after drawings = 100000 - 30000 = 70000
Actual Capital as per balance sheet = 150000 - 70000 = 80000
Therefore, there will be a profit of 10000
Capital after drawings = 100000 - 30000 = 70000
Actual Capital as per balance sheet = 150000 - 70000 = 80000
Therefore, there will be a profit of 10000
Community Answer
A firm had a Capital Balance of 1,00,000 at the beginning of a year. A...
Calculation of Net Profit/Loss
Capital Balance at the beginning of the year: 1,00,000
Total Assets at the end of the year: 1,50,000
Total Liabilities at the end of the year: 70,000
Total Withdrawals during the year: 30,000
Step 1: Calculation of Capital at the end of the year
Capital at the end of the year = Capital at the beginning of the year + Net Profit/Loss - Total Withdrawals
Capital at the end of the year = 1,00,000 + Net Profit/Loss - 30,000
Step 2: Calculation of Total Income
Total Income = Total Assets - Total Liabilities
Total Income = 1,50,000 - 70,000
Total Income = 80,000
Step 3: Calculation of Net Profit/Loss
Net Profit/Loss = Total Income - Total Expenses
Total Expenses = Capital at the end of the year - Capital at the beginning of the year + Total Withdrawals
Total Expenses = (1,00,000 + Net Profit/Loss - 30,000) - 1,00,000 + 30,000
Total Expenses = Net Profit/Loss
Net Profit/Loss = Total Income - Total Expenses
Net Profit/Loss = 80,000 - Net Profit/Loss
2 * Net Profit/Loss = 80,000
Net Profit/Loss = 40,000
Answer: The amount of Net Profit for the year is 40,000.
Explanation: The calculation of net profit/loss is done by subtracting the total expenses from the total income. Total income is the difference between total assets and total liabilities, which is 80,000 in this case. Total expenses are the sum of the capital at the end of the year, total withdrawals, and the negative of the capital at the beginning of the year. The capital at the end of the year is calculated by adding net profit/loss to the capital at the beginning of the year and subtracting total withdrawals. Substituting the values in the formula, we get the net profit/loss as 40,000. Hence, the correct answer is option (e) 40,000 Profit.
Capital Balance at the beginning of the year: 1,00,000
Total Assets at the end of the year: 1,50,000
Total Liabilities at the end of the year: 70,000
Total Withdrawals during the year: 30,000
Step 1: Calculation of Capital at the end of the year
Capital at the end of the year = Capital at the beginning of the year + Net Profit/Loss - Total Withdrawals
Capital at the end of the year = 1,00,000 + Net Profit/Loss - 30,000
Step 2: Calculation of Total Income
Total Income = Total Assets - Total Liabilities
Total Income = 1,50,000 - 70,000
Total Income = 80,000
Step 3: Calculation of Net Profit/Loss
Net Profit/Loss = Total Income - Total Expenses
Total Expenses = Capital at the end of the year - Capital at the beginning of the year + Total Withdrawals
Total Expenses = (1,00,000 + Net Profit/Loss - 30,000) - 1,00,000 + 30,000
Total Expenses = Net Profit/Loss
Net Profit/Loss = Total Income - Total Expenses
Net Profit/Loss = 80,000 - Net Profit/Loss
2 * Net Profit/Loss = 80,000
Net Profit/Loss = 40,000
Answer: The amount of Net Profit for the year is 40,000.
Explanation: The calculation of net profit/loss is done by subtracting the total expenses from the total income. Total income is the difference between total assets and total liabilities, which is 80,000 in this case. Total expenses are the sum of the capital at the end of the year, total withdrawals, and the negative of the capital at the beginning of the year. The capital at the end of the year is calculated by adding net profit/loss to the capital at the beginning of the year and subtracting total withdrawals. Substituting the values in the formula, we get the net profit/loss as 40,000. Hence, the correct answer is option (e) 40,000 Profit.
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A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss?
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A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss?.
A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss?.
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A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss?, a detailed solution for A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? has been provided alongside types of A firm had a Capital Balance of 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of 1,50,000 and total liabilities of 70,000. If the total withdrawals during the period were 30,000, what was the amount of net profit/net loss for the year: (a) 10,000 Profit (b) 20,000 Loss (c) 50,000 Loss (d) $10,000 Loss? theory, EduRev gives you an
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