Question

The following information has been extracted from the books of Akili as at 30th june 2001

Land and building	235,000
Machinery	142,000
Motor vehicle	198,000
Debtors	25,000
Capital	330,000
Creditors	50,000
Bank overdraft	200,000
Net profit for the year	62,000

From the information above, calculate Akili’s drawings for the year.

Answer 1

Assets = capital + liabilities
A= 235,000 + 142,000 + 198,000 + 25,000 = 600,000
L= 50,000+200,000=250,000
C= 600,000-250,000=350,000
C= opening capital + net profit –drawings
350,000 = 330,000+62,000-drawings
Drawings = 330,000 + 62,000 - 350,000 = 42,000