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Hello sir,
I’ve encounterd one question which stated: Drawings were- cash 750 per week for 52 weeks, cheque payments 1500.
May I know whether the cheque payment of 1500 considered as drawing as the answer only shows 39000 as drawing ?Without seeing the actual question (and therefore being able to check the the punctuation was correct), it seems that the drawings and the cheque payments are meant to be two separate things. Drawings of 52 x 750, and payments by the business from the bank (not drawings) of 1,500.
The actual question:
Philip started in business on 1 January 2015 with 60000 in a bank account. Unfortunately, he did not keep proper books of account.
He must submit a calculation of profit for the year ending 31 December 2015 to the inspector of taxes. At 31 december 2015 he had inventory valued at cost 12000; a van had cost 13500 during the year and which had depreciated during the year 3000; accounts receivable of 24000; expenses prepaid of 600; a bank balance of 51000; a cash balance 450; trade accounts payable 12000; and expenses owing 1200. His drawings were: cash 750 per week, cheque payments 1500. Draw up statements to show the profit or loss for the year.In that case the drawings are not 39,000.
The way that it is written, the total drawings are 39,000 + 1,500 = 40,500
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