Scott's Camera Shop started the year with total assets of $100,000 and total liabilities of $50,000. During the year, the business earned revenues of $200,000 and incurred expenses of $60,000. Scott made no capital contributions during the year, but did make withdrawals of $75,000. Calculate the amount of increase/decrease in Scott's equity for the year.
A)$65,000 increase
B)$115,000 increase
C)$50,000 decrease
D)$75,000 increase

Question

Quizplus · Accepted Answer

The increase in equity is calculated as: Revenues ($200,000) - Expenses ($60,000) - Withdrawals ($75,000) = $65,000 increase.

Scott's Camera Shop Started the Year with Total Assets of $100,000