[IntrepidLearner]

Exercise 4: Rearranging that formula to solve for profits looks correct.
Drawings = (Ending Net Assets + Additional Capital Introduced – Starting Net Assets) – Profit
Rearrange that to get:

Profit = (Ending Net Assets + Additional Capital Introduced – Starting Net Assets) – Drawings

Passing the values into the formula:
Profit = $80,000 + $5,000 – $70,000 – $7,000 = $85,000 – $77,000 = $8,000

Exercise 5, using the formula as it’s given:
Drawings = (Ending Net Assets + Additional Capital Introduced – Starting Net Assets) – Profit
= $110,000 + $20,000 – $90,000 – $12,000 = $130,000 – $102,000 = $28,000

[IntrepidLearner]

Thank you. That makes sense now. I’ve rewatched the lectures and can follow the methods better, alongside your explanation.

[Author]

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