The owner's equity in a business amounted to $52,000 at the beginning of the year and $100,000 at the end of the year.The owner had made no additional investments and had withdrawn $19,000 during the year.The net income for the year amounted to
A) $81,000.
B) $67,000.
C) $48,000.
D) $171,000.

Question

Quizplus · Accepted Answer

The increase in owner's equity is equal to the net income for the year minus any withdrawals made by the owner.

So, increase in owner's equity = $100,000 - $52,000 = $48,000

And, withdrawals made by the owner = $19,000

Thus, net income for the year = increase in owner's equity + withdrawals made by the owner

= $48,000 + $19,000

= $67,000

Therefore, the correct answer is B) $67,000.

The Owner's Equity in a Business Amounted to $52,000 at the Beginning