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A grocery business has net assets of $64,800 at 31 January 2008 and the net proft for the year to 31 January 2008 was $30,600.On 31 August 2007 the proprietor introduced additional capital of $7,200. He also withdrew $960 per month and on 24 December 2007 withdrew goods amounting to $840.
What were the net assets at 1 February 2007? A $51,720 B $50,040 C $39,360 D $13,920
But I’m always getting the answer 29760? What am I doing wrong sir?
I don’t know what it is you are doing wrong (does the answer in your book not show the workings?).
Have you taken the drawings as being 12 x 960 (since there are 12 months in a year) plus, obviously, 840 ?
Drawings = 12360
Increase in NA’s = 30,600 + 7,200 – 12,360 = 25,440
NA’s at start of year = 64,800 – 25,440 = 39,360
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