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Calculate the Amount of Net Income or Net Loss for the followings :

Mr. James has a Computer Peripherals business. In the beginning capital was £73,000. At the end of the year capital is £94,000.  During the year Mr. James withdrawals were £86,000. Calculate the amount of net income or net loss for the period was :

 

A) Profit of £65,000

B) Loss of £21,000

C) Loss of £13,000

D) Profit of £1,07,000

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Question added by IMRAN ALI MOHAMMED , Accounts Officer , M/s. Euro Glazing Ltd
Date Posted: 2015/03/26
Murtaza Sidhpur wala
by Murtaza Sidhpur wala , Accountant and Inventory Manager , Khalid -Al-Dabbus Tailoring Material Co. W.L.L

Mr james has made the profit of107000 .

Ahmad Ismail
by Ahmad Ismail , Chief Accountan's , Retaj Tours

Net Income =1,007,000  (86000 withdrawals &21000 difference between Big & End ) 

Youssef Talaat CMA
by Youssef Talaat CMA , accountant , Galaxy industrial equipment trading L.L.C

94,000 +86,000-73,000 = A Net income of107,000 £

Huzefa Chudawala
by Huzefa Chudawala , Finance Manager , Baniyas Co Operative Society

D) Profit of £1,07,000 (94000)

RIYAS BABU
by RIYAS BABU , Chief Accountant , House of Donuts-a

asnswer is net income/ profit107000

Anas  Dawah
by Anas Dawah , Senior Internal Auditor , Talal Abu-Ghazaleh Global (TAGI)

D-                                    

Net Income107000

Ahmed Abdi Mahad
by Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University

the formula for calculating the ending capital is as follows

Ending capital = beginning capital + net income - withdrawal 

therefore, from the above formula we can drive that the formula to calculate the net income is

net income = ending capital + withdrawal - beginning capital

=94000 +86000 -73000 =107000

Therefore, choice D is the answer

 

 

 

PRADEEP VELAYUDHAN
by PRADEEP VELAYUDHAN , Chief Accountant , Super Group

correct answer is D-107000

Shahbaz Bhatti
by Shahbaz Bhatti , Senior Product Manager (Rice) , Omar Kassem Alesayi Marketing Co. Ltd.

Current capital =                          94,000

Less capital in the beginning =73,000

Total =                                            21,000

Add Total withdrawals =            86,000

Grand total Net Income =        107,000

Blessen Abraham
by Blessen Abraham , Senior Finance Manager , Action Group Holding Co.

107000 profit for the period

Meenakshi Venu
by Meenakshi Venu , accounts and audit , Conducted audit and prepared accounts of private limited companies - alloys steel pvt ltd

Answer is option D, that is he makes a profit of $107,000

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