Question

The net income of Thomas Company was​ $73,000 for this year. The beginning balance of​ Thomas, Capital was​ $32,000 and the ending balance was​ $71,000. There were no new capital contributions during the year. What was the amount of withdrawals during the​ year?

Answer 1

To find the amount of withdrawals for Thomas Company, subtract the ending capital balance from the sum of the beginning capital balance and net income. The withdrawals for the year were $34,000.

Step-by-step explanation:

The question involves calculating the amount of withdrawals made by Thomas Company during the year given that there were no new capital contributions. To determine the amount of withdrawals, we can use the owner's equity formula where the ending capital balance equals the beginning capital balance plus net income minus withdrawals. Given the beginning balance of Thomas, Capital was $32,000, the ending balance was $71,000, and the net income was $73,000, the calculation is as follows:

Withdrawals = Beginning Capital + Net Income - Ending Capital

Withdrawals = $32,000 + $73,000 - $71,000

Withdrawals = $34,000

Therefore, the amount of withdrawals during the year was $34,000.

Answer 2

Ending balance = Beginning balance + Net income - Withdrawals

We will use this formula and put in the values given in the question

71,000= 32,000+73,000-Withdrawals

Withdrawals= 32,000+73,000-71,000= 34,000

The amount of withdrawals during the year were $34,000

Step-by-step explanation: