The net income of Edwards Inc. amounted to $74,000 for this year. The beginning balance of Owner's Capital account was $32,000 and the ending balance was $75,000. No additional contributions to capital were made during the year. What was the amount of his withdrawals during the year?

Question

Quizplus · Accepted Answer

The increase in the Owner's Capital account can be calculated as follows: 
Beginning balance + Net income - Withdrawals = Ending balance 
$32,000 + $74,000 - Withdrawals = $75,000 
Solving for Withdrawals: 
$106,000 - Withdrawals = $75,000 
Withdrawals = $31,000 
Therefore, the amount of withdrawals during the year was $31,000.

The Net Income of Edwards Inc