[ishyaka26]

I’m getting a profit of 99,490. That’s where I’m having trouble from, below is an extract of my SoPL:

Revenue 405,000
Purchases (140,000)
Opening inventory (16,000)
Closing Inventory (13,990)
Depreciation (8,500)

Gross Profit 271,490

Admin expenses (105,000)
Distribn expenses (55,000)
Bad Debts (4,000)

Operating profit 107,490

Finance charge (3,000)
Income tax expense (5,000)

Net profit 99,490

[ishyaka26]

It’s fine. But still the SoFP doesn’t balance, I’m really having trouble identifying my error and all our calculations are similar.

[ishyaka26]

Thanks @secondstar. But don’t you think your depreciation calculation is inaccurate, Note (5) suggests we use reducing balance method. You ought to have subtracted the accumulated depreciation before calculating the new depn value i.e (120,000 – 35,000) * 10% = 8,500.

[ishyaka26]

This helped me too. We should connect via twitter. Find me here @iShyaka26

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