Question

The owner's equity in a business amounted to $52,000 at the beginning of the year and $100,000 at the end of the year. The owner had made no additional investments and had withdrawn $19,000 during the year. The net income for the year amounted to _______.

A. $81,000
B. $67,000
C. $48,000
D. $171,000

Answer 1

B. $67,000

Step-by-step explanation:

The formula to compute the net income for the year is shown below:

As we know that

Ending balance in owners equity = Beginning balance in owners equity + net income - withdrawn amount

$100,000 = $52,000 + Net income - $19,000

$100,000 = $33,000 + Net income

So, the net income for the year is

= $100,000 - $33,000

= $67,000