Answer:
a. Owner made no investments in the business, and no withdrawals were made during the year.
Net income or net loss for the business during the year:
End of the year assets - Beginning of the year assets = $51,500 - $51,500 = $0
End of the year liabilities - Beginning of the year liabilities = $37,463 - $22,078 = $15,385
Net income or net loss = End of the year assets - End of the year liabilities = $0 - $15,385 = -$15,385 (Net loss)
b. Owner made no Investments in the business, but did withdraw $16,800 during the year,
Net income or net loss for the business during the year:
End of the year assets - Beginning of the year assets = $51,500 - $51,500 = $0
End of the year liabilities - Beginning of the year liabilities = $37,463 - $22,078 = $15,385
Owner withdrawals = -$16,800
Net income or net loss = End of the year assets - End of the year liabilities - Owner withdrawals = $0 - $15,385 - $16,800 = -$32,185 (Net loss)
c. Owner made no withdrawals during the year, but the owner did invest an additional $45,000 cash.
Net income or net loss for the business during the year:
End of the year assets - Beginning of the year assets = $51,500 - $51,500 = $0
End of the year liabilities - Beginning of the year liabilities = $37,463 - $22,078 = $15,385
Owner investments = $45,000
Net income or net loss = End of the year assets - End of the year liabilities + Owner investments = $0 - $15,385 + $45,000 = $29,615 (Net income)
d. Owner withdrew $16,800 during the year, but the owner did invest an additional $35,000 cash near year-end.
Net income or net loss for the business during the year:
End of the year assets - Beginning of the year assets = $51,500 - $51,500 = $0
End of the year liabilities - Beginning of the year liabilities = $37,463 - $22,078 = $15,385
Owner investments = $35,000
Owner withdrawals = -$16,800
Net income or net loss = End of the year assets - End of the year liabilities + Owner investments - Owner withdrawals = $0 - $15,385 + $35,000 - $16,800 = $12,215 (Net income)