Question

In: Accounting

Bramble Consulting started the year with total assets of $60500 and total liabilities of $15600. During...

Bramble Consulting started the year with total assets of $60500 and total liabilities of $15600. During the year, the business recorded $47900 in consulting revenues and $29300 in expenses. Bramble made an additional investment of $8900 and withdrew cash of $14900 during the year. Owner’s equity changed by what amount from the beginning of the year to the end of the year?

a. 2500

b. 12,600

c. 15,100

d. 44,900

Expert Solution

a)Begining Capital is calculated as follows:

Begining Capital = Total assets - Total liabilities

= $60,500 - $15,600

= $44,900

b) Net Income is calculated as follows:

Net Income = Consulting revenues - Expenses

= $47,900 - $29,300

= $18,600

c)Ending Capital is calculated as follows:

Ending Capital = Begining Capital + Net Income + additional investment - withdrawal

= $44,900 + $18,600 + $8900 - $14,900

= $57,500

Owner’s equity changed from the beginning of the year to the end of the year = Ending Capital - Begining Capital

= $57,500 - $44,900

= $12,600

So, Owner’s equity changed from the beginning of the year to the end of the year is $12,600

So correct answer is option (b) or $12,600

ekkarill92 answered 2 years ago

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