Mirah Company compiled the following financial information as of December 31 2016: $$\begin{array} { l r }
\text { Revenues } & \$ 340,000 \
\text { Owner's Capital (1/1/16) } & 140,000 \
\text { Equipment } & 80,000 \
\text { Expenses } & 240,000 \
\text { Cash } & 90,000 \
\text { Owner's Drawings } & 20,000 \
\text { Supplies } & 20,000 \
\text { Accounts payable } & 40,000 \
\text { Accounts receivable } & 70,000
\end{array}$$ Mirah's owner's equity on December 31 2016 is
A) $100000.
B) $140000.
C) $220000.
D) $260000.

Question

Mirah Company compiled the following financial information as of December 31 2016: $$\begin{array} { l r } 
\text { Revenues } & \$ 340,000 \
\text { Owner's Capital (1/1/16) } & 140,000 \
\text { Equipment } & 80,000 \
\text { Expenses } & 240,000 \
\text { Cash } & 90,000 \
\text { Owner's Drawings } & 20,000 \
\text { Supplies } & 20,000 \
\text { Accounts payable } & 40,000 \
\text { Accounts receivable } & 70,000
\end{array}$$ Mirah's owner's equity on December 31 2016 is
A) $100000.
B) $140000.
C) $220000.
D) $260000.

Quizplus · Accepted Answer

Owner's equity on December 31, 2016, can be calculated by starting with the Owner's Capital at the beginning of the year, adding the net income (Revenues - Expenses), and subtracting the Owner's Drawings. This gives: $140,000 + ($340,000 - $240,000) - $20,000 = $220,000.

Mirah Company Compiled the Following Financial Information as of December