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Question 25 of 27
Nancy’s business has net assets of $13,200 at the beginning of the year. During the following month she purchases new equipment for $1,200, makes sales on credit of $7,500, receives payments from customers of $3,750 and receives bills from suppliers of $2,250. These are not payable until next month.What are the net assets at the end of the month?
$15,750
$20,700
$18,150
$18,450I don’t understand why you are attempting questions for which you do not have an answer. You should use this forum to ask about whatever it is in the answer that you are not clear about.
13,200 + (7,500 – 2,250) = 18,450
(The capital at the start of the year (13,200) plus the profit for the month.)
Either you have missed something out when you typed the question (for example, is there any mention of drawings) or else the answer in your book is wrong.
On what you typed, the correct answer is 18,450 (the increase in net assets = capital introduced + profit – drawings . The profit is 5,250 and there is no capital introduced and there are no drawings.)
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