At October 1 Flambo Company reported owner's equity of $70000. During October no additional investments were made and the company earned net income of $18000. If owner's equity at October 31 totals $80000 what amount of owner drawings were made during the month?

Question

Quizplus · Accepted Answer

The owner's equity increased by $10,000 ($80,000 - $70,000) due to the net income of $18,000. Therefore, drawings must have been $8,000 to reduce the increase to $10,000.

At October 1 Flambo Company Reported Owner's Equity of $70000