Revenues for the year totaled $85,500 and expenses totaled $120,500, the owner withdrew $30,000 during the year... determine the amount of net income or net loss

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Originally Posted by stylo_67846

revenues for the year totaled $85,500 and expenses totaled $120,500, the owner withdrew $30,000 during the year.......determine the amount of net income or net loss

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I am not sure but look like 6500 net loss

Its actually net loss of 65,000

You simply take the total revenue which is 85,500 subtract your expenses which is 120,500 which gives you 35,000 you still have to remember the 30,000 that was taken by the company, so subtract that, and you should get -65,000

Net income/(loss) is determined only by subtracting expenses from revenues.

Drawing is not related to net income. Drawing comes out of equity, which does reduce the amount of increase to equity. But it's not directly related to net income itself. That is only how much the company earned over its expenses. A drawing is how much the owner removes from the company