Question

Assets and liabilities at the beginning of the period were $100,000 and $60,000, respectively. Assets and liabilities at the end of the period were $175,000 and $105,000, respectively. Withdrawals by the owner during the period were $15,000 and there was no investment by the owner during the period. The income during the period was

Answer 1

Answer:

$45,000

Explanation:

The computation of the income during the period is shown below:

Beginning stock holder equity

= $100,000 -  $60,000

= $40,000

And, the ending stockholder equity is

= $175,000 - $105,000

= $70,000

Now the net income is

As we know that

Net income = Ending balance + withdrawls - opening balance

= $70,000 + $15,000 - $40,000

= $45,000