Teamboo Company's owner's equity at the beginning of August 2022 was $740,000. During the month, the company earned net income of $175,000 and owner's drawings were $80,000. At the end of August 2022, what is the balance in owner's equity?

Question

Quizplus · Accepted Answer

The balance in owner's equity can be calculated using the formula:
Owner's Equity (end of period) = Owner's Equity (beginning of period) + Net Income - Owner's Drawings
Plugging in the numbers given, we get:
Owner's Equity (end of August 2022) = $740,000 + $175,000 - $80,000
Owner's Equity (end of August 2022) = $835,000
Therefore, the balance in owner's equity at the end of August 2022 is $835,000, which is option D.

Teamboo Company's Owner's Equity at the Beginning of August 2022