Incomplete Records: Preparation of Statement of Affairs - Calculation of Profit - SS2 Accounting Lesson Note
Question:
The following are single entry transactions for Bode for the month ended May 2022. You are required to prepare the statement of affairs and derive the calculation of profit.
|
Date |
Description |
Amount (₦) |
|
May 1 |
Bode invested cash in the business |
100,000 |
|
May 3 |
Purchased merchandise for cash |
20,000 |
|
May 6 |
Sold merchandise for cash |
25,000 |
|
May 10 |
Paid rent for the month of May |
10,000 |
|
May 12 |
Bought furniture for cash |
15,000 |
|
May 15 |
Received cash from a debtor |
5,000 |
|
May 18 |
Bought merchandise on credit |
30,000 |
|
May 22 |
Sold merchandise on credit |
35,000 |
|
May 30 |
Received payment from debtor |
25,000 |
Answer:
STATEMENT OF AFFAIRS AS OF MAY 31, 2022
|
Assets |
Amount (₦) |
Liabilities |
Amount (₦) |
|
Cash Debtors Merchandise Furniture Total assets |
120,000 15,000 15,000 15,000 165,000 |
Creditors Capital Total liabilities and capital |
30,000 105,000 165,000 |
CALCULATION OF PROFIT FOR THE MONTH ENDED MAY 31, 2022
|
Item |
Amount (₦) |
|
Sales Cost of goods sold Gross profit Operating expenses Net profit before tax Income tax expense Net profit after tax |
60,000 (30,000) 30,000 (10,000) 20,000 (5,000) 15,000 |