If the opening balance of equity is $45,000, the closing balance is $60,000 and profit is $27,000, calculate the amount of drawings which will appear as a financing outflow in the cash flow statement.

Question

Quizplus · Accepted Answer

The formula to calculate the amount of drawings is:

Drawings = Opening Balance of Equity + Profit - Closing Balance of Equity

Drawings = $45,000 + $27,000 - $60,000

Drawings = $12,000

Therefore, option C is correct, and the amount of drawings which will appear as a financing outflow in the cash flow statement is $12,000.

If the Opening Balance of Equity Is $45,000, the Closing