A company had the following assets and liabilities at the beginning and end of a recent year.
Assets Liabilities

Beginning of the year $ 97,000 $ 41,584
End of the year 155,500 62,978

Required:
Determine the net income earned or net loss incurred by the business during the year for each of the following separate cases: (Input all amounts as positive values. Omit the "$" sign in your response.)

(a) Owner made no investments in the business and no withdrawals were made during the year.

What is the Net Income? $

(b) Owner made no investments in the business but withdrew $1,200 cash per month for personal use.

What is the Net Income? $

(c) No withdrawals were made during the year but the owner invested an additional $45,000 cash.

What is the Net Loss? $

(d) Withdrew $1,200 cash per month for personal use and the owner invested an additional $25,000 cash.

What is the Net income? $

what's stopping you. Here is a clue. Assets - liabilities = equity

Quote:

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Originally Posted by paraclete

what's stopping you. here is a clue. assets - liabilities = equity

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Yeah I know that but I've been unable to properly answer questions A - D with correct answers, will you please help figure out what I'm doing wrong?

Quote:

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Originally Posted by Omoruyi Kalonji

Yeah I know that but I've been unable to properly answer questions A - D with correct answers, will you please help figure out what I'm doing wrong?

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Show me your workings?

In the Beginning of the Year
Assets = 97,000
Liabilities = 41,584
Equity = 55,416

In the End of the Year
Assets = 155,500
Liabilities = 62,978
Equity = 92,522

So what do I need to do in order to get the Net Income and Net Loss for Questions A - D?

I need to determine the net income earned or net loss incurred by the business during the year for each of the following separate cases:

(a) Owner made no investments in the business and no withdrawals were made during the year.

What is the Net Income?

(b) Owner made no investments in the business but withdrew $1,200 cash per month for personal use.

What is the Net Income?

(c) No withdrawals were made during the year but the owner invested an additional $45,000 cash.

What is the Net Loss?

(d) Withdrew $1,200 cash per month for personal use and the owner invested an additional $25,000 cash.

What is the Net income?

Barring any other explanation the movement in equity represents net income for the year

If there is an addition to capital or drawings this will change the result

Quote:

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Originally Posted by paraclete

barring any other explanation the movement in equity represents net income for the year

if there is an addition to capital or drawings this will change the result

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O.k then, being that there was no activity with the owners investments or withdrawals then the answer for A. is 37,106 is this correct?

Yes