Day: January 11, 2023

Alex has not kept proper records for his business.

Between 31 December 2014 and 31 December 2015 his net assets had increased by £30,000.

On 1 January 2015, Alex brought into the business his private car which had cost £12,000, but now has a re-sale value of £8,000.

Drawings for the year ended 31 December 2015 were £16,000.

What was Alex’s profit for the year ended 31 December 2015?

Select ONE answer:

1. £22,000
2. £26,000
3. £34,000
4. £38,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct = £30k + £16k – £8k (Calculating Alex’s profit, which is the increase in net assets, £30 000, plus drawings, £16 000, less the value of the car when introduced, £8000 = £38 000.)

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