For an art project, Lisa has decided to decorate the letter block “L” (shown in the diagram) built from two rectangular prisms.
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In case there is no double entry system is followed, profit can be calculated by comparing the opening and closing capital. In the given situation this can be calculated as:
Opening Capital Rs.200000
Add: Capital Introduced Rs.200000
Add: Profit for the year Rs. 250000
Less: Loss for the year Rs.NIL
Less: Drawings Rs. 30000
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Capital at the end of the year Rs.620000
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Loan taken is a liability and loan given is asset, that will not affect the capital.
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