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-   -   Andruw began business on January 1, 2011, with an investment of $94,610. (https://www.askmehelpdesk.com/showthread.php?t=796734)

  • Jul 14, 2014, 06:26 PM
    Astamp
    Andruw began business on January 1, 2011, with an investment of $94,610.
    Unsure how to find the net income for 2011, with a drawing of 15,699
  • Jul 16, 2014, 11:15 AM
    pready
    You need to know what ending Owners Equity is before you can solve this. Beginning Owners Equity is your initial investment.
    If you have year end assets and liabilities, then ending owners equity is ending assets minus ending liabilities.

    The formula for finding changes in owners equity is:
    Ending Owners = Beginning Owners Equity + Investments - Drawings or dividends + net Income

    Since you are trying to find net income the formula can be rewritten to:
    Net Income = Ending Owners Equity - Beginning Owners Equity - Investments + Drawings

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