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The extract of Danny Ltd statement of financial position as at 31″ December 2008 shows the following balances:
Non-current assets
$10,000
Current assets
$3,400
Share capital
$200
Non-current liabilities
$2,100
Current liabilities
$1,700
The sales, purchases and expense records of Danny Lid have unfortunately been destroyed and the directors need help estimating the net profit for the year so that they can estimate their tax liability. They have informed that the retained earnings at 31 December 20X7 were $7,350.
What was the profit/loss (before tax) made by Danny Ltd during the year ended 31 December 20X8?
A $2,250
B $2,450
C $2,050
D $9,400
can you help me with this question
Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit and that has answers and explanations.
The answer is indeed C. The retained earnings at the end of the year are 9,400 and therefore the profit for the year is 9,400 – 7,350 = 2,050 🙂
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