At October 1, Smithson Enterprises reported owner's equity of $35,000. During October, the owner made additional investments of $2,000 and the company earned net income of $6,000. If owner's equity at October 31 totals $40,000, what amount of owner drawings were made during the month?

Question

Quizplus · Accepted Answer

Owner's equity at October 31 = Owner's equity at October 1 + Additional investments + Net income - Owner drawings$40,000 = $35,000 + $2,000 + $6,000 - Owner drawingsOwner drawings = $40,000 - $35,000 - $2,000 - $6,000Owner drawings = $3,000

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