At October 1 Flambo Company reported owner's equity of $76000. During October no additional investments were made and the company posted a net loss of $8000. If owner's equity at October 31 totals $64000 what amount of owner drawings were made during the month?

Question

Quizplus · Accepted Answer

The change in owner's equity can be calculated as follows:
Beginning owner's equity + additional investments - net income - owner drawings = Ending owner's equity
$76,000 + $0 - $8,000 - owner drawings = $64,000
Solving for owner drawings, we get:
Owner drawings = Beginning owner's equity - Ending owner's equity + Net income
Owner drawings = $76,000 - $64,000 + (-$8,000) = $4,000
Therefore, option B is the correct answer.

At October 1 Flambo Company Reported Owner's Equity of $76000