Wale started business on 1st January 2022 with D 100,000 as capital and kept few records.
His assets and liabilities as at 31st December 2022 were as follows:
D
Premises 280,000
Loan 150,000
Stock 62,000
Debtors 4,800
Creditors 13,200
Bank 12,400
Wale withdrew D 17,300 cash for his personal use and deposited an additional cash of D 8,000 into the business account.
You are required to:
(a) Calculate the Closing Capital;
(b) Prepare Statement of Net Profit for the year ended 31st December 2022;
(c) Prepare the Balance Sheet as at that date.
(a) Statement of the affairs as at 31st December, 2022
| Asset | D | D |
| Premises | 280,000 | |
| Stock | 62,000 | |
| Debtors | 4,800 | |
| Bank | 12,400 | |
| 359,200 | ||
| Less: liabilities | ||
| Loan | 150,000 | |
| Creditors | 13,200 | (163,200) |
| Closing capital | 196,000 |
(b) Statement of net profit for the year
| Asset | D | D |
| Closing capital | 196,000 | |
| Add: drawing | 17,300 | |
| 213,300 | ||
| Less: Opening capital | 100,000 | |
| : Additional capital | 8,000 | (108,000) |
| Net profit for the year | 105,300 |
(c) Balance Sheet as at 31st December, 2020
| D | D | Fixed assets: | D | D | |
| Opening capital | 100,000 | Premises | 280,000 | ||
| Add: additional capital | 8,000 | Current Assets | 62,000 | ||
| Net profit | 105,300 | 113,300 | Stock | 4,800 | |
| Less: drawing | 213,300 | Debtor | 12,400 | 79,200 | |
| Closing capital | (17,300) | Bank | |||
| Liabilities | 196,000 | ||||
| Loan | 150,000 | ||||
| Creditors | 13,200 | 163,200 | |||
| 359,200 | 359,200 |
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