Question 27
Incomplete Records31 Dec. 05: Total fixed assets ₦7 800; Total current assets ₦12 100; Total current liabilities ₦4 700
31 Dec. 06: Total fixed assets ₦6 600; Total current assets ₦17 800; Total current liabilities ₦3 800
Drawings for 2006 is N5 200
What is the net profit for 2006?
- A.N19 000
- B.N16 000
- C.N12 600
- D.N10 600
Show the answer and explanation
Answer: D (N10 600)
Explanation
Capital 2006 = 6 600 + 17 800 − 3 800 = ₦20 600. Net profit = closing capital − opening capital + drawings = 20 600 − 15 200 + 5 200 = ₦10 600.