We read your photo as:

Calculate her profit or loss for the year ended 31 Dec 2003

Accounting

ScanSolve AI Answer

Step-by-step solution

4 steps

Here's how to calculate Fatima's profit or loss using the incomplete records method.

  1. Calculate the opening capital as at 1 January 2003.

    Opening Assets=Equipment+Inventory+Amounts owing from clients+Rent paid in advance+Balance at bank=$800+$70+$50+$100+$150=$1170Opening Liabilities=Creditors for supplies+Electricity owing=$25+$40=$65Opening Capital=Opening Assets−Opening Liabilities=$1170−$65=$1105\begin{align*} \text{Opening Assets} &= \text{Equipment} + \text{Inventory} + \text{Amounts owing from clients} + \text{Rent paid in advance} + \text{Balance at bank} \\ &= \$800 + \$70 + \$50 + \$100 + \$150 \\ &= \$1170 \\ \\ \text{Opening Liabilities} &= \text{Creditors for supplies} + \text{Electricity owing} \\ &= \$25 + \$40 \\ &= \$65 \\ \\ \text{Opening Capital} &= \text{Opening Assets} - \text{Opening Liabilities} \\ &= \$1170 - \$65 \\ &= \$1105 \end{align*}

  2. Calculate the closing capital as at 31 December 2003.

    Closing Assets=Equipment+Inventory+Amounts owing from clients+Rent paid in advance+Balance at bank=$1000+$45+$70+$120+$160=$1395Closing Liabilities=Creditors for supplies+Electricity owing=$30+$50=$80Closing Capital=Closing Assets−Closing Liabilities=$1395−$80=$1315\begin{align*} \text{Closing Assets} &= \text{Equipment} + \text{Inventory} + \text{Amounts owing from clients} + \text{Rent paid in advance} + \text{Balance at bank} \\ &= \$1000 + \$45 + \$70 + \$120 + \$160 \\ &= \$1395 \\ \\ \text{Closing Liabilities} &= \text{Creditors for supplies} + \text{Electricity owing} \\ &= \$30 + \$50 \\ &= \$80 \\ \\ \text{Closing Capital} &= \text{Closing Assets} - \text{Closing Liabilities} \\ &= \$1395 - \$80 \\ &= \$1315 \end{align*}

  3. Calculate the total drawings for the year.

    Total Drawings=Drawings per week×Number of weeks in a year=$100×52=$5200\begin{align*} \text{Total Drawings} &= \text{Drawings per week} \times \text{Number of weeks in a year} \\ &= \$100 \times 52 \\ &= \$5200 \end{align*}

  4. Calculate the profit or loss for the year.

    Profit/Loss=(Closing Capital+Drawings)−Opening Capital=($1315+$5200)−$1105=$6515−$1105=$5410\begin{align*} \text{Profit/Loss} &= (\text{Closing Capital} + \text{Drawings}) - \text{Opening Capital} \\ &= (\$1315 + \$5200) - \$1105 \\ &= \$6515 - \$1105 \\ &= \$5410 \end{align*}

    Fatima's profit for the year ended 31 December 2003 is \boxed{\text{\5410}}$.

Was this helpful?

Still stuck on this one?

Ask a follow-up, and the answer starts from this question.

Got a different question?Ask your own question
Got a syllabus? Photograph it and I'll tell you what's due and what's worth the most.
Handwritten step-by-step solution preview

Handwritten Step-by-Step Solution

Get this as a handwritten image on WhatsApp — like a tutor wrote it for you.

Try on WhatsApp