Calculate the profit for the year if capital at the beginning is $45,000, capital at the end is $40,000 and during the year the owner withdrew $15,000.
A)$5,000.
B)$15,000.
C)$10,000.
D)$20,000.

Question

Quizplus · Accepted Answer

The profit for the year can be calculated using the formula:

Profit = capital at the end - capital at the beginning - owner's withdrawal

Substituting the given values:

Profit = $40,000 - $45,000 - $15,000 
Profit = -$20,000

A negative profit means that the business incurred a loss, which is not one of the given answer choices. Therefore, the closest answer is the one that represents the smallest absolute value of the profit, which is $10,000 represented by choice C.

Calculate the Profit for the Year If Capital at the Beginning