Forums › FIA Forums › FA2 Maintaining Financial Records Forums › Profit
- This topic has 5 replies, 2 voices, and was last updated 3 years ago by maximus07.
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- May 19, 2021 at 5:45 pm #621089
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?
$1,175,000
$1,275,000
$1,325,000
$1,375,000I am unaware of answer. Please help. Along with solution. Thank you sir.
May 19, 2021 at 7:06 pm #621109Profit = Change in net assets + Drawings – Capital introduced
= [750,000 (cash) + 200,000 (Nca) – 100,000 (Depn] + 575,000 (WC)] + Drawings – 250,000
= 1,175(assuming no drawings)
May 19, 2021 at 8:38 pm #621115Thank you sir.
May 19, 2021 at 8:41 pm #621116How we calculated capital introduced sir?
May 20, 2021 at 8:48 am #6211821000 shares introduced – 750 load repaid.
May 20, 2021 at 10:00 am #621187Ok sir.
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