If total assets are Rs 4,00,000 ; net worth is Rs 1,20,000 profit is Rs 25,000 ; Compute - Accountancy - Recording of Transactions - I

Question

If total assets are Rs 4,00,000 ; net worth is Rs 1,20,000 &
profit is Rs 25,000 ; Compute the creditors

Neha Chopra · Accepted Answer

Dear Student

We know that net worth = Total Assets - External and Current
Liabilities
Current Liabilities = Total Assets - net worth
Current liabilities = 4,00,000 - 1,20,000 = 2,80,000

Therefore Current liabilities or creditors = 2,80,000/-

Note: Since net worth includes all profits and reserves it has been
assumed that the net profit given in the question is included in
the net worth given in the question

Regards

If total assets are Rs.4,00,000 ; net worth is Rs.1,20,000 & profit is Rs.25,000 ; Compute the creditors.