The following balances were taken from the accounts of Adelaide Enterprises.
31 Dec.2013 31 Dec.2014
Assets $450 000 $610 000
Liabilities 270 000 310 000
Assuming there were no drawings or contributions of capital,profit for 2014 must have been:

Question

Quizplus · Accepted Answer

The increase in assets from $450,000 to $610,000 is a net increase of $160,000. This increase in assets could have come from either the profits earned during the year or from a contribution of capital, but the question specifies that there were no contributions of capital or drawings, so the increase in assets must be from profits. Therefore, the profit for 2014 is $160,000.

The Following Balances Were Taken from the Accounts of Adelaide