Given: N - Capital at the beginning N20,000, Drawings N3,000, Capital at end N30,000, New capital introduced N8,000.
What is the profit for the period?
What is the profit for the period?
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Correct Answer: Option B
Explanation:
To calculate the profit for the period, we can use the following formula:
Formula:
\[
\text{Profit} = \text{Closing Capital} - \text{Opening Capital} - \text{New Capital Introduced} + \text{Drawings}
\]
Given:
- Opening Capital = ₦20,000
- Closing Capital = ₦30,000
- New Capital Introduced = ₦8,000
- Drawings = ₦3,000
Calculation:
\[
\text{Profit} = 30,000 - 20,000 - 8,000 + 3,000
\]
\[
\text{Profit} = 10,000 - 8,000 + 3,000
\]
\[
\text{Profit} = 5,000
\]
Correct Answer: B. ₦5,000
This is the profit earned during the period based on the changes in capital, new capital introduced, and drawings made.
To calculate the profit for the period, we can use the following formula:
Formula:
\[
\text{Profit} = \text{Closing Capital} - \text{Opening Capital} - \text{New Capital Introduced} + \text{Drawings}
\]
Given:
- Opening Capital = ₦20,000
- Closing Capital = ₦30,000
- New Capital Introduced = ₦8,000
- Drawings = ₦3,000
Calculation:
\[
\text{Profit} = 30,000 - 20,000 - 8,000 + 3,000
\]
\[
\text{Profit} = 10,000 - 8,000 + 3,000
\]
\[
\text{Profit} = 5,000
\]
Correct Answer: B. ₦5,000
This is the profit earned during the period based on the changes in capital, new capital introduced, and drawings made.