X started a business on 1st January 2016 with capital of rupees 500000...
Calculation of X's Closing Capital and Profit
Initial Investment
- Capital invested by X on 1st January 2016 = Rs. 500000
Withdrawals
- Withdrawals made by X during the year = Rs. 120000
Assets and Liabilities
- Total assets as on 31st December 2016 = Rs. 850000
- Total liabilities as on 31st December 2016 = Rs. 75000
Calculation of X's Closing Capital
To calculate X's closing capital, we need to subtract his withdrawals and liabilities from his total assets.
Closing Capital = Total Assets - Withdrawals - Liabilities
Closing Capital = Rs. 850000 - Rs. 120000 - Rs. 75000
Closing Capital = Rs. 655000
Calculation of X's Profit
To calculate X's profit, we need to find the difference between his closing capital and his initial investment. Additionally, we need to add any income earned during the year.
Profit = Closing Capital - Initial Investment + Income
Profit = Rs. 655000 - Rs. 500000 + Income
Profit = Rs. 155000 + Income
Therefore, X's closing capital is Rs. 655000 and his profit is Rs. 155000 plus any additional income earned during the year.