28 February 2013

28 February 2012



Non Current assets
Current Assets
Non Current Liabilities
Current Liabilities

396 000
208 000
193 000
24 000

380 000
140 000
200 000
32 000




The capital contribution was unchanged during the financial year ended 28 February 2013. The proprietor did not make any drawings during this period. Which one of the following amounts represents the net profit for the year ended 28 February 2013?

R388 000
R100 000
R 84 000



This is really confusing me, please help

First you have to get total assets and total liabilities. So for total assets simply add your non-current and current assets together. For total liabilities simply add your non-current liabilities and current liabilities together. You need to do this for 2012 and for 2013.

Now you need to know the basic accounting equation. Which is:
Assets = Liabilities + Owners Equity

This formula can be rewritten to find owners equity as:
Owners Equity = Assets - Liabilities

You need to find owners equity for 2012 and 2013.

Now you have to account for the change in owners equity from 2012 to 2013.

Since there was no drawings(withdrawals) or additional investments(capital contribution) made in the year the change in owners equity is Net Profit, so simply take your owners equity in 2013 minus the owners equity in 2012 to get your net profit.