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Accounting for profits

This topic has 1 reply, 2 voices, and was last updated 9 years ago by yasirmehmood84.

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January 17, 2015 at 5:09 pm #222884
Jattzz
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This is the question
Sole trader – assets at the beginning of the year £186k
assets at the end of the year £274k
Drawings – £68k
Additional capital – £50k
What is his profit for the year? (please show how you worked it out) ?
January 19, 2015 at 1:42 pm #222987
yasirmehmood84
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Think about it that if there is no drawing then assets at the end of year is 274+68=342
So that difference is 342-186=156 which is increase in assets 50 against capital and 106 against profit.
or you can say (274-186)+68-50=106
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