ICAEW AF · Chapter 12 · Question 1 of 11
A sole trader's capital at the start of the year was £45,000. During the year the owner introduced a further £5,000, took cash drawings of £19,800 and took goods costing £1,500 for personal use. Profit for the year was £28,600. What is the closing capital?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) £57,300
Explanation
Closing capital = opening capital + capital introduced + profit - drawings. Drawings include both the cash £19,800 and the goods £1,500, a total of £21,300. Closing capital = £45,000 + £5,000 + £28,600 - £21,300 = £57,300.
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