Marilu Company began the year with owner's equity of $15,000. During the year, Marilu received additional owner investments of $21,000, recorded expenses of $60,000, and had owner drawings of $4,000. If Marilu's ending owner's equity was $46,000, what was the company's revenue for the year?

Question

Quizplus · Accepted Answer

The change in owner's equity is calculated as: Ending equity ($46,000) - Beginning equity ($15,000) = $31,000. The net income is calculated as: Change in equity ($31,000) + Drawings ($4,000) - Additional investments ($21,000) = $14,000. Revenue is calculated as: Net income ($14,000) + Expenses ($60,000) = $74,000.

Marilu Company Began the Year with Owner's Equity of $15,000