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Pls what’s the complete effect of Cash($30000) and Inventory($85000) drawings for private use on the statements?
For the cash:
Dr Drawings Cr Cash
For the inventory:
Dr Drawings Cr Purchases
Therefore in the SOPL: Purchases reduces by 85,000 and therefore profit increases by 85,000
On the SOFP: Cash reduces by 30,000; Drawings increase by 115,000: (and obviously profit increases by 85000).
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