Test Index

JAMB Accounts Principles of Accounts 2018 Paper

Question : 20

Total: 88

Use the information below to answer the question

Solution:

Concept:

Net profit is the increase in capital after adjusting for drawings.

Explanation:

Using the capital equation:

\text{Closing capital} = \text{Opening capital} + \text{Net profit} - \text{Drawings}

So:

\text{Net profit} = \text{Closing capital} - \text{Opening capital} + \text{Drawings}

Substituting the values gives:

\text{Net profit} = 22{,}800 - 20{,}000 + 6{,}400 = 9{,}200

Answer:

#9,200

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