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    khanyisile Mann's Avatar
    khanyisile Mann Posts: 1, Reputation: 1
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    #1

    Mar 15, 2014, 12:47 AM
    How to calculate the net profit using only the totals for the assets and liabilities.
    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
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Mar 15, 2014, 06:35 AM
    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.
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