Question
A.R. Smith began business on January 1 by investing $20 000 cash in his company. During the year, the business had revenue of $60 000
A.R. Smith began business on January 1 by investing $20 000 cash in his company. During the year, the business had revenue of $60 000 and expenses of $44 500. He withdrew $8000 during the year for his personal use. He turned over to the business, for use by the business, his personal automobile valued at $9000.
A. What was the net income of the business for the year? Show your calculations.
B. What was the amount in the Capital account on January 1st? On December 31st?
What caused the increase or decrease in capital during the year?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
A To calculate the net income of the business for the year we need to subtract the expenses from the ...
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Step: 2
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
