Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000.During the year,the business earned revenues of $120,000 and incurred expenses of $70,000.Scott made no capital contributions during the year,but did make withdrawals of $60,000.
-The net change in Scott's owner's equity for the year is a:
A) $10,000 decrease.
B) $40,000 increase.
C) $30,000 decrease.
D) $50,000 increase.

Question

Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000.During the year,the business earned revenues of $120,000 and incurred expenses of $70,000.Scott made no capital contributions during the year,but did make withdrawals of $60,000. 
-The net change in Scott's owner's equity for the year is a:
A) $10,000 decrease.
B) $40,000 increase.
C) $30,000 decrease.
D) $50,000 increase.

Quizplus · Accepted Answer

A) Calculations: $120,000 - $70,000 - $60,000 = ($10,000)

Scott's Camera Shop Started the Year with Total Assets of $80,000