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A grocery business has net assets of $64800 at 31 Jan 2008 and the net profit for the year to 31 Jan 2008 was $30600 on 31 august 2007 the proprietor introduced additional capital of $7200 .He also withdrew $960 per month and on 24 December 2007 withdrew goods amounting to $840
what were the net assets at 1 Feb 2007 ?
a) $51720
b) $50040
c) $39360
d) $13920solve plx
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This question has two tricks involved, it asked for Opening Balance instead of closing balance. And the withdrawal is given in month instead of in year.
let OB be the opening balance.
OB + Profit + Additional capital – Withdrawal – Goods taken = Closing balance
OB = closing balance -Profit – Additional capital + Withdrawal + Goods taken
=$64,800 – $30,600 -$7,200 + ($960 X 12) + $840
= $39,360 (Answer C)
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