Missing figure

A business has net assets of £31240 on 31 May 2011. On the 1st June 2010 the net assets of the business were £26450. The owner knows, that he took £12300 of drawings out of the business during the year in cash and £560 of goods for his own use.
What was the profit of the business for the year?

Comments

  • amandagarrattamandagarratt WidnesRegistered, Tutor Posts: 10
    Hi
    Opening capital is the same as opening net assets = £26450
    Closing capital is the same as closing net assets = £31240
    If drawings were £12300 and £560 (goods) you can put these into the capital account to find the balancing figure:

    Opening capital £26450
    + Profit (balancing figure) £17,650
    - Drawings £12860 (12300 + 560)
    = Closing capital £31240

    Hope this makes sense?

    :)


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