If you have understood this chapter you should be able to calculate Judy Brooks's profit for the year to 31 December 1989 from the information which follows. Take care - some information has been listed which is not needed. Provided you understand the difference between capital and revenue expenditure, and capital and revenue receipts, you should not find it too difficult.

Year ended 31 December 1989 Sales revenue - meals and drinks Cost of food and drinks sold Purchase of equipment Rent and rates Depreciation on fixed assets Loan from bank Additional finance invested by owner Insurances Waiters' wages Drawings Gas and electricity

£

20,000 7,000 2,000 500 500 1,000 4,000 200 4,000 2,000 800