Question

Using the expanded accounting equation, calculate and enter the answers for each question. You will need to use the answers you calculate for beginning and ending equity to answer the rest of the questions. Assets Liabilities Beginning of Year: $25,000 $18,000 End of Year: $61,000 $28,000

1) What is the equity at the beginning of the year?

2) What is the equity at the end of the year?

3) If the owner contributes $5,900 and the owner withdraws $41,700, how much is net income (loss)?

4) If net income is $3,300 and owner withdrawals are $5,200, how much did the owner contribute (owner, capital)?

5) If the owner contributes $19,100 and net income is $17,900, how much did the owner withdraw (owner, withdrawals)?

6) If the owner contributes $42,200 and the owner withdraws $1,300, how much is net income (loss)?

Answer 1

In the given question, we have to apply different accounting equations to calculate answer

Hence, in each question we will use respective equation as per requirement

1. Asset = liabilities + equity

$25000 = $18000 + equity

Equity = $7000

2. Asset = liabilities + equity

$61000 = $28000 + equity

Equity = $33000

Hence beginning equity = $7000 and ending equity = $33000

3. Beginning equity + owners contribution - owners withdrawal + net income = ending equity

$7000 + $5900 - $41700 + net income = $33000

Net income = $61800

4. Beginning equity + owners contribution - owners withdrawal + net income = ending equity

$7000 + owners contribution - $5200 + $3300= $33000

Owners contribution = $27900

5. Beginning equity + owners contribution - owners withdrawal + net income= ending equity

$7000 + $19100 - owners withdrawal + $17900=

$33000

Owners contribution = $11000

6. Beginning equity + owners contribution - owners withdrawal + net income = ending equity

$7000 + $42200 - $1300 + net income = $33000

Net loss = $14900