Net income is $29,000. Beginning capital was $34,000. Ending capital was $55,000. What were the cash withdrawals for the proprietorship??

Question

Quizplus · Accepted Answer

The cash withdrawals can be calculated by adjusting the change in capital for the net income. The change in capital is the ending capital ($55,000) minus the beginning capital ($34,000), which equals $21,000. Since net income of $29,000 would increase the capital, but the actual increase is only $21,000, the difference of $8,000 is the amount withdrawn.

Net Income Is $29,000