• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

PQ Awards Nominations

Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Get ready modules – FR

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Get ready modules – FR

  • This topic has 3 replies, 2 voices, and was last updated 10 months ago by alawi sayed.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 1, 2022 at 3:39 pm #652516
    alawi sayed
    Participant
    • Topics: 154
    • Replies: 168
    • ☆☆☆

    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

    April 2, 2022 at 9:36 am #652557
    alawi sayed
    Participant
    • Topics: 154
    • Replies: 168
    • ☆☆☆

    Hello Sir,

    I Can attempt the question like that I will say that the change in net assets contains the addition of capital+the profit for the year -the drawings ,so

    88000-50000+88000=$126000 is that the correct approach of the question .

    Thanks

    April 3, 2022 at 4:24 pm #652640
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    Yes, that’s correct but you will rarely see this in FR as it is more common in FFA when we look at incomplete records.

    Thanks

    April 3, 2022 at 9:44 pm #652669
    alawi sayed
    Participant
    • Topics: 154
    • Replies: 168
    • ☆☆☆

    Thanks Sir.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • tobimillz100 on Activity Based Costing part 1 – ACCA Performance Management (PM)
  • omarcham on IASB Conceptual Framework – Introduction – ACCA Financial Reporting (FR)
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • ANISH1903 on Outsourcing, shared services and disruptive technologies – ACCA Strategic Business Leader (SBL)

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy