Theory question 103
Incomplete RecordsThe following is the Statement of Affairs of Chukwuemeka's Enterprises as at 1st January 1986.
Creditors ₦2,000; Bills payable ₦600; Capital ₦3,000; Total ₦5,600
Plant and Equipment ₦3,000; Stock ₦1,000; Debtors ₦500; Bills Receivable ₦1,000; Cash ₦100; Total ₦5,600
On 31st December, 1986, the following were the ledger balances: Creditors ₦1,500; Plant and Equipment ₦2,500; Debtors ₦1,000; Bills payable ₦800; Stock ₦500; Bills receivable ₦700; Cash ₦10.
His drawings during the period amounted to ₦800. Prepare statement to show the closing capital and net profit.
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Statement of Affairs as at 31 December 1986
Assets: plant and equipment 2,500; stock 500; debtors 1,000; bills receivable 700; cash 10; total 4,710
Less liabilities: creditors 1,500; bills payable 800; total 2,300
Closing capital = ₦2,410
Statement of profit for 1986: closing capital 2,410 + drawings 800 = 3,210 − opening capital 3,000 = net profit ₦210
Profit = closing capital + drawings − opening capital (+ any new capital).