Question

Financial information related to the proprietorship of Rockwell Interiors for February and March 20Y0 is as follows:

a. Prepare balance sheets for Ebony Interiors as of February 29 and March 31, 20Y0.
b. Determine the amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month.
c. Determine the amount of net income for March, assuming that the owner made no additional investments but withdrew $50,000 during the month.

Answer 1

(a.)

Rockwell Interiors Balance Sheet February 29, 20Y0
Assets
Cash	290,000
Accounts receivable	720,000
Supplies	30,000
Total Assets	1,040,000
Liabilities
Accounts payable	280,000
Owner\'s Equity
Justin Berk, capital	760,000	(Balance)
Total Liabilities and Owner\'s Equity	1,040,000

Rockwell Interiors Balance Sheet March 31, 20Y0
Assets
Cash	340,000
Accounts receivable	870,000
Supplies	32,000
Total Assets	1,242,000
Liabilities
Accounts payable	360,000
Owner\'s Equity
Justin Berk, capital	882,000	(Balance)
Total Liabilities and Owner\'s Equity	1,242,000

(b.) The amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month

Net Income for March	$ 122,000
($882,000 - $760,000)

(c.) The amount of net income for March, assuming that the owner made no additional investments but withdrew $50,000 during the month.

Net Income for March	$ 532,000
($882,000 + $50,000 - $760,000)

Net Income for March$ 532,000($882,000 + $50,000 - $760,000)