Question
Calculate the total liability if: Owner’s
capital at the beginning is ₹60,000. Creditors at the end is ₹50,000. Revenue during the period is ₹70,000. Expenses during the period are ₹65,000. Also, calculate the amount of owner’s capital at the end.Solution
Total liability is calculated as: Total Liability = Owner's Capital at the End + Creditors To find Owner's Capital at the end: Owner's Capital at the End = Owner's Capital in the Beginning + Revenue - Expenses Owner's Capital at the End = ₹60,000 + ₹70,000 - ₹65,000 = ₹65,000 Thus, Total Liability = ₹65,000 + ₹50,000 = ₹1,15,000
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