Question

Dynamic production services started the year with total assets of? $130,000 and total liabilities of? $50,000. the company is a sole proprietorship. the revenues and the expenses for the year amounted to? $100,000 and? $60,000, respectively. during the? year, there were no new capital contributions and the owner withdrew? $45,000. calculate? dynamic's net income for the year.

Answer 1

Dynamic's net income for the year is calculated by subtracting the expenses from the revenues, which results in a net income of $40,000. The owner's withdrawal is not included in this calculation.

Step-by-step explanation:

To calculate Dynamic's net income for the year, we need to subtract the total expenses from the total revenues. In this case, the revenues are $100,000, and the expenses are $60,000. Therefore, the net income can be calculated as follows:

Net Income = Revenues - Expenses

Net Income = $100,000 - $60,000

Net Income = $40,000

Note that the owner's withdrawal of $45,000 and the capital contributions are not included in the calculation of net income, because these transactions affect the owner's equity, not the net income.

Answer 2

Dynamic Production Services net income for the year is $40,000.00
[$100,000.00 (revenues) - $60,000.00 (expenses) = $40,000.00]