ACCA Applied Knowledge · Financial Accounting · Incomplete records
Marisol, a sole trader, has no drawings records. Opening net assets were $50,000 and closing net assets were $68,000. She introduced additional capital of $10,000 and made a profit for the year of $30,000. What were her drawings for the year?
Drawings were $22,000. Opening capital of $50,000 plus $10,000 introduced plus $30,000 profit gives $90,000 before drawings. Since closing capital is $68,000, the difference of $22,000 must have been withdrawn by the owner.
- A$22,000Correct
- B$2,000
- C$38,000
- D$12,000
Explanation
Closing capital = opening 50,000 + capital introduced 10,000 + profit 30,000 - drawings = 68,000. So drawings = 90,000 - 68,000 = 22,000. Option D (12,000) ignores the capital introduced, treating the 10,000 as not added.
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