The net assets of Stuart Ltd. at 1 January 20X1 amounted to £128,000. During the year ended 31 December 20X1 he introduced a further £50,000 of capital and made drawings of £48,000. At 31 December 20X1 Stuart Ltd's net assets totalled £94,000
What was Stuart Ltd.s profit/ (loss) for the year ended 31 December 20X1?

Question

Quizplus · Accepted Answer

The profit or loss can be calculated by adjusting the opening net assets with the capital introduced and drawings, then comparing to the closing net assets. Starting with £128,000, adding £50,000, and subtracting £48,000 gives £130,000. The actual closing net assets are £94,000, indicating a loss of £36,000 to reconcile the difference.

The Net Assets of Stuart Ltd