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JAMB Principles of Accounts 2006 Question 40

Question 40

Incomplete Records

Given:
January: Assets ₦28 320; Creditors ₦5 620
December: Assets ₦25 320; Creditors ₦10 320
The proprietor made drawings of ₦755 per month for personal use.
The profit for the period is

  1. A.₦3 000
  2. B.₦1 360
  3. C.₦9 060
  4. D.₦7 700.
Show the answer and explanation

Answer: B (₦1 360)

Explanation

Capital fell from 22 700 to 15 000 (−₦7 700). Drawings = 755 × 12 = ₦9 060. Profit = −7 700 + 9 060 = ₦1 360.