If beginning capital was $120,000,ending capital is $90,000,and the owner's withdrawals were $15,000,the amount of net income or net loss was:
A)net income of $5,000.
B)net income of $15,000.
C)net loss of $15,000.
D)net loss of $5,000.

Question

Quizplus · Accepted Answer

The calculation for net income or net loss is: Beginning Capital + Net Income - Owner's Withdrawals = Ending Capital

Therefore: 
$120,000 + Net Income - $15,000 = $90,000 
$105,000 + Net Income = $90,000 
Net Income = -$15,000

Since the calculation resulted in a negative number, it means there was a net loss of $15,000. Therefore, the best choice is C.

If Beginning Capital Was $120,000,ending Capital Is $90,000,and the Owner's