JAMB Accounting 2007 Objective — Question 30

Question 30 of 46 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2007 Objective paper, with the correct answer and a full explanation.

Use the information below to answer questions 30 and 31. 1/7/2005 to 30/6/2006: Drawings 3,000; Capital 25,000 to 42,050; Furniture and fittings 6,500 to 10,200. Additional capital during the year amounts to 300% of the drawings. Calculate the net profit or loss made during the year.

A. #15,100 profit
B. #15,100 loss
C. #11,500 profit
D. #11,500 lossCorrect

Explanation

Additional capital = 300% x 3,000 = 9,000. Net profit/loss = Closing capital - (Opening capital + Additional capital) + Drawings = 42,050 - (25,000+9,000) + 3,000 = 42,050 - 34,000 + 3,000, giving a net loss of #11,500.

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