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Zorluk: KolayPreparation of Final Accounts from Incomplete Records

At the beginning of the financial year, a business had net assets worth ₦50,000. During the year, the proprietor introduced additional capital of ₦10,000 and withdrew ₦5,000 for personal use. If the net assets at the end of the year stood at ₦70,000, what is the net profit for the year?

  1. A
    ₦5,000
  2. B
    ₦10,000
  3. ₦15,000Cevap
  4. D
    ₦25,000

Cevap

The net profit for the year is ₦15,000.
Under the capital comparison (statement of affairs) method, profit is derived by adjusting closing capital for owner's capital transactions. Adding back owner's drawings (₦5,000) to closing capital (₦70,000) yields ₦75,000. Subtracting additional capital introduced (₦10,000) and opening capital (₦50,000) gives a net profit of ₦15,000.

Adım Adım Çözüm

1
Identify the relevant formula for profit determination under the capital comparison method.
Net Profit=Closing Capital+Drawings−Additional Capital Introduced−Opening Capital\text{Net Profit} = \text{Closing Capital} + \text{Drawings} - \text{Additional Capital Introduced} - \text{Opening Capital}
Drawings reduce closing capital so they must be added back, while new capital introduced increases closing capital so it must be removed to find net profit earned from operations.
2
Substitute the given monetary values into the formula.
Net Profit=₦70,000+₦5,000−₦10,000−₦50,000\text{Net Profit} = ₦70,000 + ₦5,000 - ₦10,000 - ₦50,000
Net assets equal capital (Opening Capital = ₦50,000, Closing Capital = ₦70,000).
3
Perform the final calculation.
Net Profit=₦75,000−₦60,000=₦15,000\text{Net Profit} = ₦75,000 - ₦60,000 = ₦15,000
Subtracting total initial/added equity from adjusted closing equity yields the net profit for the year.

Anahtar Kavram

Statement of Affairs / Capital Comparison Method for Profit Determination
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Konular

Preparation of Final Accounts from Incomplete Records

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