El Centro Company began the year with owner's equity of $30000. During the year El Centro received additional owner investments of $42000 recorded expenses of $120000 and had owner drawings of $12000. If El Centro's ending owner's equity was $112000 what was the company's revenue for the year?

Question

Quizplus · Accepted Answer

The company's revenue can be calculated using the formula for changes in owner's equity: Ending Owner's Equity = Beginning Owner's Equity + Owner Investments + Revenue - Expenses - Owner Drawings. Plugging in the given values: $112,000 = $30,000 + $42,000 + Revenue - $120,000 - $12,000. Solving for Revenue gives $172,000.

El Centro Company Began the Year with Owner's Equity of $30000