The income statement for the month of June 2016 of Snap Shot Inc. contains the following information: $\begin{array}{lr}
\text { Revenues } &&\$7,300 \
\text { Expenses: } & \
\text { Salaries and Wages Expense } & \$ 3,000 \
\text { Rent Expense } & 1,300 \
\text { Advertising Expense } & 700 \
\text { Supplies Expense } & 200 \
\text { Insurance Expense } & 100 \
\quad \text { Total expenses } &&5,300 \
\text { Net income } &&\$2,000
\end{array}$ At June 1 2016 Snap Shot reported owner's equity of $36000. The company had no owner drawings during June. At June 30 2016 the company will report owner's equity of
A) $30700.
B) $36000.
C) $38000.
D) $43300.

Question

Quizplus · Accepted Answer

The owner's equity at June 1 was $36,000. We need to add the net income of $2,000 ($20,000 - $18,000) to this amount to get the total equity at June 30. Therefore, the owner's equity at June 30 will be $38,000.

The Income Statement for the Month of June 2016 of Snap