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Asset/Liabilities sole trade

BBanu12y ago
Mr John pls help me to understand I don't know what to do with cf bal of "At 31 December 20X8, Amy had assets of $614,130 and liabilities of $369,770." Amy is a sole trader and had assets of $569,400 and liabilities of $412,840 on 1 January 20X8. During the year ended 31 December 20X8 she paid $65,000 capital into the business and she paid herself wages of $800 per month. At 31 December 20X8, Amy had assets of $614,130 and liabilities of $369,770. What is Amy's profit for the year ended 31 December 20X8? my workings: bal bf Assets 569,400 introduce cap 65,000 new Asset bal 121,940 bal bf Liabilities 412,840 wages 800*12 = 9,600 new Liab. bal 422,440 What is the answer? thank you
John MoffatJohn MoffatTutor12y ago#1
Increase in net assets = profit + cap introduced - drawings Net assets at start of year = 569400 - 412840 = 159560 Net assets at end of year = 614130 - 369770 = 244360 So increase in NA's = 244360 - 159560 = 84800 So....84800 = profit + 65000 - (12 x 800) So profit = 29400
MMutaher12y ago#2
There is a mistake in your calculations i think. Net asset at start of the year should be 156560 Therefore profit should be 32400 ?
John MoffatJohn MoffatTutor12y ago#3
True - sorry :-(
BBanu12y ago#4
Great thank Mr John for the help
John MoffatJohn MoffatTutor12y ago#5
You are welcome :-)
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