Multiple choice

Opening capital Rs. 20, 000, closing capital Rs. 10, 000, profit during the year Rs. 5, 000. Additional capital introduced Rs. 1, 000, Drawing will be

  1. Rs. 16, 000

  2. Rs. 18, 000

  3. Rs. 23, 000

  4. Rs. 25, 000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The capital equation is: Closing Capital = Opening Capital + Profit - Drawings + Additional Capital. Therefore: 10,000 = 20,000 + 5,000 - Drawings + 1,000. Solving: Drawings = 20,000 + 5,000 + 1,000 - 10,000 = 16,000. Option B is miscalculated, option C adds instead of subtracts, option D is incorrect.

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