A sole trader had opening capital of £25,000 and closing capital of £7,500. During the year the owner introduced further capital of £8,000 and withdrew £12,000 for her own use. The profit or loss during the year was? A. £13,500 loss B. £21,500 loss C. £33,000 profit D. £37,500 profit

A sole trader had opening capital of £25,000 and closing capital of £7,500. During the year the owner introduced further capital of £8,000 and withdrew £12,000 for her own use. The profit or loss during the year was? A. £13,500 loss B. £21,500 loss C. £33,000 profit D. £37,500 profit

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 2.12E: Net income and dividends The income statement of a corporation for the month of February indicates a...

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

A sole trader had opening capital of £25,000 and closing capital of £7,500.
During the year the owner introduced further capital of £8,000 and withdrew
£12,000 for her own use. The profit or loss during the year was?
A. £13,500 loss
B. £21,500 loss
C. £33,000 profit
D. £37,500 profit

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