Question

Savvy Sightseeing had beginning equity of $72,000; revenues of $90,000, expenses of $65,000, and withdrawals by owners of $9,000. Calculate the ending equity.

A.$88,00

B. $25,00

C. $97,00

D. $38,00

E. $47,000

Answer 1

$88,000

Step-by-step explanation:

The computation of the ending equity is shown below:

= Beginning balance of equity + net income - withdrawals by owners

= $72,000 + $25,000 - $9,000

= $88,000

The net income is computed below:

= Revenues - expenses

= $90,000 - $65,000

= $25,000

To find out the ending equity we added the net income and deduct the withdrawn amount to the beginning equity