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A business’s bank balance increased by $750,000 during its last financial year. During the same period it
issued shares of $1 million and repaid a loan note of $750,000. It purchased non-current assets for
$200,000 and charged depreciation of $100,000. Working capital (other than the bank balance) increased by
$575,000.
What was its profit for the year?
A $1,175,000
B $1,275,000
C $1,325,000
D $1,375,000opening capital + introduced capital – withdrawals + profit = closing capital
=>
opening capital + 1,000 – 0 +profit = opening capital + 750 + 750 + 200 -100 + 575
=>
profit = 1,175key point :
closing capital = opening capital + increase in assets + decrease in liabilitiesgood luck
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