At October 1, Smithson Enterprises reported owner's equity of $35,000. During October, no additional investments were made and the company earned net income of $4,000. If owner's equity at October 31 totals $32,000, what amount of owner drawings were made during the month?

Question

Quizplus · Accepted Answer

Owner's equity decreased by $3,000 despite earning $4,000 in net income, indicating that $7,000 was withdrawn (drawings) during the month.

At October 1, Smithson Enterprises Reported Owner's Equity of $35,000