Jaime's data: Capital start 14,000; Capital end 12,300; Loan received 4,000; Cash drawings 17,200; Private phone charges paid by business 300. What was the profit for the year?

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SSC Financial and Cost Accounting P-1 QUESTION #6112

Question 1

Jaime's data: Capital start $14,000; Capital end $12,300; Loan received $4,000; Cash drawings $17,200; Private phone charges paid by business $300. What was the profit for the year?

$11,800
$15,500
$15,800✔️
$19,200

Correct Answer Explanation

Option C ($15,800) is correct.

Total drawings = Cash drawings $17,200 + Private phone $300 = $17,500

The loan is a liability, not capital introduced.

Profit = Closing capital + Drawings − Opening capital = $12,300 + $17,500 − $14,000 = $15,800

More Options