Eric Lu began a small business on 1 July 2015 by depositing $250000 into a business bank

Question:

Eric Lu began a small business on 1 July 2015 by depositing $250000 into a business bank account. On 30 June for the next 3 years, the assets and liabilities of the business were as follows:


30 June


Total assets


Total liabilities

2016

2017

2018


$580000

650000

740 000


$350000

370000

420000


Required:

By analysing the changes in equity each year, calculate the profit (loss) made by the business for each year ending 30 June, assuming the following events also occurred:

  1. On 1 January 2016, Eric withdrew $20 000 in cash from the business for personal use.
  2. On 28 August 2016, Eric invested additional cash of $30 000 into the business.
  3. On 31 July 2017, Eric invested additional cash of $25 000 into the business.
  4. On 28 January 2018, Eric withdrew $30 000 in cash for personal use.
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Accounting

ISBN: 978-1118608227

9th edition

Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett

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