Answer:
$125,000
Explanation:
Opening values of;
Total assets = $120,000
Total liabilities = $40,000
Total equity = $120,000 - $40,000 = $80,000
During the year,
Total revenues = $140,000
Total expenses = $50,000
Withdrawal by owner = $45,000
The amount withdrawn by the owner reduces the owners equity. This may be deducted from the net income.
Net income from the year = $140,000 - $50,000 - $45,000
= $45,000
This will be added to the opening owner's equity to get the closing owner's equity.
Owner's equity at the end of the year = $80,000 + $45,000
= $125,000
