On January 1, 2009, Affleck Company reported owner's equity of $470,000. During the year, the owner withdrew cash of $20,000. At December 31, 2009, the balance in owner's equity was $500,000. What amount of net income or net loss would the company report for 2009?

Question

Quizplus · Accepted Answer

The change in owner's equity can be determined by the formula:
Ending Owner's Equity = Beginning Owner's Equity + Net Income - Owner Withdrawals 
$500,000 = $470,000 + Net Income - $20,000 
$30,000 = Net Income 
Therefore, the company would report a net income of $30,000 for 2009. The correct answer is choice D.

On January 1, 2009, Affleck Company Reported Owner's Equity of $470,000