Question

May 31, 2018 June 30, 2018Total Assets $211,000 $209,000Total Liabilities 133,000 99,000Begin by identifying the accounting equation and the formula expressed by the statement of​ owner's equity​ (the "equity​equation"): ​(Abbreviation used: Account.​ = Accounting.)Account. equation: =Equity equation: =For each of the following situations that occurred in June, 2018 with regard to own-er’s contributions and withdrawals, compute the amount of net income or net loss during June 2018.​(Use a minus sign or parentheses for a net​loss.)a. The owner contributed $25,000 to the business and made no withdrawals.Net income(loss) = $b. The owner made no contributions. The owner withdrew cash of $7,500.Net income(loss) = $c. The owner made contributions of $35,000 and withdrew cash of $22,000.Net income (loss) = $

Answer 1

To calculate the net income or net loss for different situations involving owner's contributions and withdrawals, we need to find the change in total assets and total liabilities from May 31 to June 30. The net income or net loss can be calculated by subtracting the change in total liabilities from the change in total assets.

Step-by-step explanation:

In this question, we are given the total assets and total liabilities for two different dates (May 31, 2018 and June 30, 2018). We are then asked to calculate the net income or net loss for three different situations that occurred in June 2018, involving the owner's contributions and withdrawals. Let's go step by step to solve each situation:

a. The owner contributed $25,000 to the business and made no withdrawals.

To calculate the net income or net loss, we need to find the change in total assets and total liabilities from May 31 to June 30. The change in total assets is $209,000 - $211,000 = -$2,000. The change in total liabilities is $99,000 - $133,000 = -$34,000. Therefore, the net income or net loss is -$2,000 - (-$34,000) = $32,000.

b. The owner made no contributions. The owner withdrew cash of $7,500.

The change in total assets is $209,000 - $211,000 = -$2,000. The change in total liabilities is $99,000 - $133,000 = -$34,000. Therefore, the net income or net loss is -$2,000 - (-$34,000) = $32,000.

c. The owner made contributions of $35,000 and withdrew cash of $22,000.

The change in total assets is $209,000 - $211,000 = -$2,000. The change in total liabilities is $99,000 - $133,000 = -$34,000. Therefore, the net income or net loss is -$2,000 - (-$34,000) = $32,000.

Answer 2

a. $7,000

b. $39,500

c. $19,000

Step-by-step explanation:

a. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities - contribution) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 - $25,000) - ($211,000 - $133,000)

= $85,000 - $78,000

= $7,000

b. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities + cash withdrawn) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 + $7,500) - ($211,000 - $133,000)

= $117,500 - $78,000

= $39,500

c. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities + cash withdrawn - contribution) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 + $22,000 - $35,000) - ($211,000 - $133,000)

= $97,000 - $78,000

= $19,000