ABC TECH started a business with a capital of 5... - SS2 Accounting Computation of Profits From Two Balance Sheets Showing The Opening And Closing Capital Question
ABC TECH started a business with a capital of ₦50,000. At the end of the year, their capital had increased to ₦60,000. The company made additional investments of ₦5,000 during the year and did not make any drawings. What is the company’s profit for the year?
Profit = Closing Capital - Opening Capital - Additional Investments + Drawings
Profit = ₦60,000 - ₦50,000 - ₦5,000 + 0
Profit = ₦5,000
Therefore, Mr. A's profit for the year is ₦5,000.
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