WAEC Accounting 2015 Paper

Concept:Net profit is found by comparing capital at the beginning and end of the year, then adding back drawings.Explanation:Use the accounting relation: Capital = Assets − Liabilities.Opening capital:Opening assets $= 1{,}460 + 3{,}600 = 5{,}060$Opening capital $= 5{,}060 - 600 = 4{,}460$Closing capital:Closing assets $= 4{,}200 + 3{,}200 = 7{,}400$Closing capital $= 7{,}400 - 700 = 6{,}700$Increase in capital $= 6{,}700 - 4{,}460 = 2{,}240$Drawings during the year $= \mathrm{D}1{,}500$Net profit = Increase in capital + DrawingsNet profit $= 2{,}240 + 1{,}500 = 3{,}740$Answer:Net profit for the year is $\mathrm{D}3{,}740$.Therefore, the correct option is B.