(a) Yogesh commenced business on 1st April, 2011 with a Capital of Rs. 5,00,000 and a loan of Rs. 1,00,000 borrowed from Citi Bank . On 31st March, 2012 , his assets were Rs. 8,00,000. Calculate his closing capital and profits earned during the year.
(b) If in the above case, the proprietor had introduced fresh capital of Rs. 40,000 and had withdrawn Rs. 10,000 for personal purposes, calculate his profits.

Explanation

(a) Closing Capital Rs. 7,00,000, Profit Rs. 2,00,000.
(b ) Profit Rs. 1,70,000.