Get ready modules - FR

Hello Sir, In the following question can you please clarify how they got the profit of the year, as what I understand is that the net assets should equal the equity +Retained earnings +reserve . Thanks, ------------------------------- The following information is available for a sole trader who keeps no accounting records: $ Net business assets at 1 July 20X6 186,000 Net business assets at 30 June 20X7 274,000 During the year ended 30 June 20X7: Cash drawings by proprietor 68,000 Additional capital introduced by proprietor 50,000 Business cash used to buy a car for the proprietor’s wife, who takes no part in the business 20,000 Using this information, what is the trader’s profit for the year ended 30 June 20X7? Select one: $50,000 $86,000 $90,000 $126,000 Using the balance sheet equation: Profit = Change in net assets – capital introduced + drawings i.e. (274,000 – 186,000) – 50,000 + (68,000 + 20,000) = $126,000 The correct answer is: $126,000