Scott's Camera Shop started the year with total assets of $90,000 and total liabilities of $60,000.During the year,the business earned revenues of $150,000 and incurred expenses of $60,000.Scott made no additional capital contributions during the year,but did make drawings of $70,000.What is the amount of owners' equity at the end of the year?

Question

Quizplus · Accepted Answer

The owner's equity at the beginning of the year is $30,000 ($90,000 assets - $60,000 liabilities). During the year, the net income is $90,000 ($150,000 revenues - $60,000 expenses). After accounting for the drawings of $70,000, the owner's equity at the end of the year is $50,000 ($30,000 + $90,000 - $70,000).

Scott's Camera Shop Started the Year with Total Assets of $90,000