Question

state the procedure for calculating profit or loss through statement of affairs

Answer 1

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Add back the capital withdrawal amount for an accurate reading of the company's profit or loss. Therefore, the formula for determining profit and loss under the statement of affairs method is capital at the end of the period plus drawings minus new capital contributions less beginning capital.

@MissTranquillity

Answer 2

Answer:

Use this formula,

Capital balance at opening plus additions less withdrawals plus/minus Profit/Loss = Capital balance at the end.

Explanation: