Incomplete Records: Preparation of Statement of Affairs - Calculation of Profit - SS2 Accounting Lesson Note
Question:
The following are single entry transactions for Bode for the month ended May 2022. You are required to prepare the statement of affairs and derive the calculation of profit.
|
Date |
Description
Amount (₦)
May 1
Bode invested cash in the business
100,000
May 3
Purchased merchandise for cash
20,000
May 6
Sold merchandise for cash
25,000
May 10
Paid rent for the month of May
10,000
May 12
Bought furniture for cash
15,000
May 15
Received cash from a debtor
5,000
May 18
Bought merchandise on credit
30,000
May 22
Sold merchandise on credit
35,000
May 30
Received payment from debtor
25,000
Answer:
STATEMENT OF AFFAIRS AS OF MAY 31, 2022
|
Assets |
Amount (₦)
Liabilities
Amount (₦)
Cash
Debtors
Merchandise
Furniture
Total assets
120,000
15,000
15,000
15,000
165,000
Creditors
Capital
Total liabilities and capital
30,000
105,000
165,000
CALCULATION OF PROFIT FOR THE MONTH ENDED MAY 31, 2022
|
Item |
Amount (₦)
Sales
Cost of goods sold
Gross profit
Operating expenses
Net profit before tax
Income tax expense
Net profit after tax
60,000
(30,000)
30,000
(10,000)
20,000
(5,000)
15,000