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Double entry bookkeping

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Double entry bookkeping

  • This topic has 5 replies, 2 voices, and was last updated 9 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • April 17, 2016 at 7:35 am #310410
    yoke93
    Member
    • Topics: 16
    • Replies: 34
    • ☆☆

    Hi Sir,
    The profit made by a business in 20×7 was $35400.The proprietor inject new capital of $10200 during the year and withdrew a monthly salary of $500

    If net assest at the end of 20×7 were $95100 ,what was the propritor capital at the beginning of the year?

    A.$50000
    B.$55500
    C.$63900
    D.$134700

    Y the answer is B and not A?

    April 17, 2016 at 8:44 am #310422
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    Using the accounting equation:

    Closing net assets – opening net assets = profit + capital introduced – drawings

    Therefore, 95100 – opening net assets = 35400 + 10200 – 6000 = 39600
    So opening net assets (which equals opening capital) = 95100 – 39600 = 55500

    April 17, 2016 at 1:48 pm #310445
    yoke93
    Member
    • Topics: 16
    • Replies: 34
    • ☆☆

    Hi Sir, how to get $6000 for drawing?? 12x 500 = $6000 ?? Am I rite?

    April 17, 2016 at 3:56 pm #310460
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    Yes – there are 12 months in a year and so 500 a month is 6000 in a year

    April 18, 2016 at 3:36 am #310823
    yoke93
    Member
    • Topics: 16
    • Replies: 34
    • ☆☆

    Ok… thank you…..

    April 18, 2016 at 8:29 am #310980
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
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