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    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.

    A Total Liability: ₹1,10,000; Owner’s Capital at the End: ₹60,000 Correct Answer Incorrect Answer
    B Total Liability: ₹1,05,000; Owner’s Capital at the End: ₹65,000 Correct Answer Incorrect Answer
    C Total Liability: ₹1,15,000; Owner’s Capital at the End: ₹65,000 Correct Answer Incorrect Answer
    D Total Liability: ₹1,20,000; Owner’s Capital at the End: ₹70,000 Correct Answer Incorrect Answer
    E Total Liability: ₹1,25,000; Owner’s Capital at the End: ₹60,000 Correct Answer Incorrect Answer

    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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