im having trouble w/ this excercise for my acctg homework:
"Four different proprietorships, M, N, O and P, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner's equity, are summarized as follows:
Total Assets:
Beginning of the Year: $ 750,000
End of the Year: $1,200,000
Total Liabilities:
Beginning of the Year: $300,000
End of the Year: $650,000
On the basis of the above data and the following additional info for the year, determine the net income(or loss) of each company for the year. (hint: 1st determine the amount of increase or decrease in owner's equity during the year.)
Company M: owner made no additional investments in the buisness and no withdrawls
Company N: owner made no additional investments in the business, but had withdrawn $60,000
Company O: owner made additional investment of $150,000 but had made no withdrawls
Company P: owner made additional investment of $150,000 and had withdrawn $60,000."
help?
2007-02-26 05:07:37 · 1 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
As you know, Equity is Assets less Liabilities.
The change in equity is earnings (excluding investments and withdrawals).
The change in assets was 450,000. The change in liabilities was 350,000. The change in equity is therefore 100,000 for the year.
The logic is: What is the change in equity without the investment or withdrawals?
M made no investment or withdrawal. Earnings are 100,000.
N must add back the withdrawal of 60,000. Earnings are 160,000 before the withdrawal.
O must deduct investment of 150,000. Earnings are -50,000 before making the investment of 150,000.
P must deduct 150,000 and add 60,000. Earnings are 10,000.
2007-02-26 05:33:10 · answer #1 · answered by Latigo 3 · 0⤊ 0⤋
This Site Might Help You.
RE:
net income/owners equity?
im having trouble w/ this excercise for my acctg homework:
"Four different proprietorships, M, N, O and P, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner's equity, are summarized as follows:
Total Assets:
Beginning...
2015-08-07 18:17:41 · answer #2 · answered by Saxon 1 · 0⤊ 0⤋
A
2016-03-16 21:39:25 · answer #3 · answered by Anonymous · 0⤊ 0⤋