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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 121,940bal bf Liabilities 412,840
wages 800*12 = 9,600
new Liab. bal 422,440What is the answer?
thank youIncrease 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
There is a mistake in your calculations i think.
Net asset at start of the year should be 156560
Therefore profit should be 32400 ?
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