The following details relate to the equity of R. Simpson, sole proprietor.
$\begin{array}{lcc}
& \text { End year 1 } & \text { End year 2 } \
\text { Capital } & \$ 60000 & \$ 60000 \
\text { Current account } & 24000 \mathrm{CR} & 38000 \mathrm{CR}^{*}
\end{array}$
$\text { * Includes nrofit for the vear of } \$ 48000$
How much was withdrawn by R. Simpson during year 2?

Question

The following details relate to the equity of R. Simpson, sole proprietor.
$\begin{array}{lcc} 
& \text { End year 1 } & \text { End year 2 } \
\text { Capital } & \$ 60000 & \$ 60000 \
\text { Current account } & 24000 \mathrm{CR} & 38000 \mathrm{CR}^{*}
\end{array}$
$\text { * Includes nrofit for the vear of } \$ 48000$
How much was withdrawn by R. Simpson during year 2?

Quizplus · Accepted Answer

The profit for year 2 is $48,000, which increased the current account from $24,000 to $38,000. To find the withdrawals, calculate the difference in the current account after adjusting for the profit: $38,000 (end balance) - $24,000 (start balance) - $48,000 (profit) = -$34,000, indicating withdrawals of $34,000.

The Following Details Relate to the Equity of R * Includes nrofit for the vear of $48000\text { * Includes nrofit for the vear of } \$ 48000 * Includes nrofit for the vear of $48000

The Following Details Relate to the Equity of R $\text { * Includes nrofit for the vear of } \$ 48000$