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JAMB Principles of Accounts 2007 Question 30

Question 30

Incomplete Records

1/7/2005: Drawings –; Capital ₦25 000; Furniture and fittings ₦6 500
30/6/2006: Drawings ₦3 000; Capital ₦42 500; Furniture and fittings ₦10 200
Additional capital during the year amounts to 300% of the drawings.
Calculate the net profit or loss made during the year.

  1. A.₦15 100 profit
  2. B.₦15 100 loss
  3. C.₦11 500 profit
  4. D.₦11 500 loss.
Show the answer and explanation

Answer: C (₦11 500 profit)

Explanation

Additional capital = 300% × 3 000 = ₦9 000. Profit = 42 500 − 25 000 − 9 000 + 3 000 = ₦11 500 profit.