Q.A trader's position was as follows. On 1st April 2024: Cash ₹3,500; Stock ₹13,500; Debtors ₹10,000; Machinery ₹9,000; Creditors ₹8,500. On 31st March 2025: Cash ₹5,000; Stock ₹16,500; Debtors ₹12,500; Machinery (after depreciation) ₹8,200; Creditors ₹9,500. During the year he withdrew ₹4,500 for personal use and introduced no additional capital. Find the profit for the year.

Find capital at both dates using the Statement of Affairs, then add back drawings since no additional capital was introduced.

Opening: (3,500+13,500+10,000+9,000) − 8,500 = 27,500. Closing: (5,000+16,500+12,500+8,200) − 9,500 = 32,700. Profit = 32,700 − 27,500 − 0 + 4,500 = 9,700.

Statement of Affairs as on 1st April 2024

Statement of Affairs as on 31st March 2025

Profit = Capital at the end − Capital at the beginning − Additional Capital introduced + Drawings

= 32,700 − 27,500 − 0 + 4,500

= 5,200 + 4,500

= ₹9,700.

Since no additional capital was introduced during the year, the entire increase in net worth (₹5,200) plus the amount withdrawn (₹4,500) together represent the trader's genuine profit for the year. The Machinery figure given for 31st March 2025 is already stated "after depreciation," so no separate depreciation adjustment is required.

Students sometimes forget to add back drawings at all when no additional capital was introduced, wrongly assuming the plain increase in capital (₹5,200) is already the full profit figure.