Calculate the profit using balance sheet, Accounting Basics

Assignment Help:

Part 1

(a) Name and describe the three concepts that form the basis of double entry bookkeeping, and explain how they form the basis of double entry bookkeeping.

(b) How does profit fit into the accounting equation?

Part 2

Alex Bisset started in business on 1 July 2011. His trial balance as at 30 June 2012 was as follows:

Alex Bisset trial balance as at 30 June 2012

DR CR

£ £

Opening capital 10,000

Capital contributed during the year 6,000

Drawings 3,000

Bank loan 5,000

Non-current assets 20,000

Receivables control 7,250

Cash 4,500

Payables control 6,750

Sales 50,000

Purchases 35,000

Other expenses 8,000

77,750 77,750

Calculate profit earned during the period using both the balance sheet approach and the income statement approach to income determination.

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