Scott's Camera Shop started the year with total assets of $80 000 and total liabilities of $40 000. During the year, the business earned revenues of $120 000 and incurred expenses of $70 000. Scott made no capital contributions during the year, but did make withdrawals of $60 000. What is the amount of Scott's owners' equity at the end of the year?

Question

Quizplus · Accepted Answer

Scott's owners' equity at the beginning of the year is $40,000 ($80,000 assets - $40,000 liabilities). During the year, net income is $50,000 ($120,000 revenues - $70,000 expenses). After accounting for withdrawals of $60,000, the ending owners' equity is $30,000 ($40,000 beginning equity + $50,000 net income - $60,000 withdrawals).

Scott's Camera Shop Started the Year with Total Assets of $80