Determine the net income. The owner's equity at the beginning of the period is $20,000. The owner made cash withdrawals that total $7,000. At the end of the period the owner's equity is $37,000.

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Business

Johnathan Medina

2 March, 21:02

Determine the net income. The owner's equity at the beginning of the period is $20,000. The owner made cash withdrawals that total $7,000. At the end of the period the owner's equity is $37,000.

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Fatima Baldwin · Answer 1

The equation of owners equity is revenue minus expenses. So basically in this question,

(Owner's Equity at the beginning of the period) $20,000 + (Revenue/Net income) $ * - (Drawings/Cash Withdrawal) $7,000 = (Owner's Equity at the end of period) $37,000

Using the above formula, solving gives, Net Income: $24,000