Given: ....................January.............December Assets................₦28,320.............₦25,320 Creditors.............₦5,620..............₦10,320 ...
Question 1 Report
Given:
....................January.............December
Assets................₦28,320.............₦25,320
Creditors.............₦5,620..............₦10,320
The proprietor made drawings of ₦755 per month for personal use.
The profit for the period is?
Answer Details
To find the profit for the period, we need to calculate the difference between the January and December assets, and then adjust for any drawings made by the proprietor during the year.
The change in assets over the period is:
December assets - January assets = ₦25,320 - ₦28,320 = -₦3,000
A negative change in assets means that assets decreased over the period, which could be due to losses or drawings made by the proprietor.
To adjust for the proprietor's drawings, we need to add them back to the decrease in assets:
-₦3,000 + (₦755 x 12) = ₦6,060
Now we can calculate the profit for the period by subtracting the increase in liabilities from the adjusted change in assets:
₦6,060 - (₦10,320 - ₦5,620) = ₦1,360
Therefore, the profit for the period is ₦1,360.
Answer: ₦1,360
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