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Land and buildings- 500
Inventory- 200
Increase in Net Assets- 40
Closing Capital- 100
Drawings- 90
Capital Introduced during the year- 40
Bank loan- 300Calculate the profit.
In my class my teacher asked me to do this math but I failed and he told me the answer would be 90. Can you plz explain this to me Sir? Please help me with this one!!
I do suggest that you watch my free lectures – they are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
What you are asking is covered in detail on the second chapter of the free lecture notes, and the lectures that go with it.Increase in net assets = capital introduced + profit – drawings.
Therefore:
40 = 40 + profit – 90Therefore:
profit = 40 – 40 + 90 = 90.Thank you so much Sir!! Appreciate it. And yes I’ll watch your videos. Thanks again.
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