Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 11 - No. 44)
If the opening equity of a business is $10,000, the owner introduces new capital of $2,000, makes drawings of $1,000, and the closing equity is $12,000, what is the profit or loss for the year?
$1,000 Loss
$1,000 Profit
$2,000 Loss
$2,000 Profit
Explanation
Profit = Closing Equity + Drawings - Opening Equity - New capital = 12,000 + 1,000 - 10,000 - 2,000 = 1,000
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