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For the Sole Trader’s SOFP, under Capital, the capital should be: Capital invested + Profits – Drawings. The resulting figure will be used in the following year’s SOFP.
Question 01: The profit is the Gross Profit or Net profit? Do we need to minus expense when adding profit here?
Question 02; Do we add “other income” as well to the profit?
The profit is the net profit, which is after subtracting expenses and after adding any other income.