Question

Mogere traders had the following information from his books of account as at 31st December 2009
Capital 1/1/09 sh. 6,800,000
Additional capital sh. 1,221,560
Drawing for the year sh. 50,440
Capital 31/12/09 sh. 9,800,000
Determine the profit for the year.

Answer 1

Closing capital = opening capital + added investment + profits – drawings

9,800,000 = 6,800,000+1,221,560 +p -50,440

9,800,000 = 7,971,120 +p

P =1,828,880