a Joli Upfront began the Upfront Company by investing 72931

a) Joli Upfront began the Upfront Company by investing $72931 of cash in the business. The company recorded revenues of $572557, expenses of $431515, and had owner drawings of $52398. What was Upfront\'s net income for the year?

b) ABC Company began the year with owner\'s equity of $243222. During the year the company recorded revenues of $362970, expenses of $286807, and had owner drawings of $51896. What way ABC\'s owner\'s equity at the end of the year?

Solution

Answer a.

Revenues = $572,557
Expenses = $431,515

Net Income = Revenues - Expenses
Net Income = $572,557 - $431,515
Net Income = $141,042

Answer b.

Revenues = $362,970
Expenses = $286,807

Net Income = Revenues - Expenses
Net Income = $362,970 - $286,807
Net Income = $76,163

Owners’ Equity at the end of the year = Owners’ Equity at the beginning of the year + Net Income - Drawings
Owners’ Equity at the end of the year = $243,222 + $76,163 - $51,896
Owners’ Equity at the end of the year = $267,489