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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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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