Question

Zapper has a beginning equity of $279,000, net income of $62,000, withdrawals of $51,000, and investments by owners of $17,000. What is its ending equity?

a) $307,000
b) $307,000
c) $327,000
d) $258,000

Answer 1

To find Zapper's ending equity, add the beginning equity to the net income and investments, then subtract withdrawals. The calculation yields an ending equity of b) $307,000.

Step-by-step explanation:

The student is asking about calculating the ending equity of a company given its beginning equity, net income, withdrawals, and investments by owners. To find the ending equity, you need to start with the beginning equity, add any net income, add any investments by owners, and subtract any withdrawals.

In this case, Zapper has a beginning equity of $279,000. We add the net income of $62,000, add investments by owners of $17,000, and subtract withdrawals of $51,000.

Calculating the ending equity:

• Beginning equity: $279,000
• + Net income: $62,000
• + Investments by owners: $17,000
• - Withdrawals: $51,000

Ending equity = $279,000 + $62,000 + $17,000 - $51,000 = $307,000. Therefore, the correct answer is b) $307,000.