Question

May 31, 2018 June 30, 2018Total Assets $211,000 $209,000Total Liabilities 133,000 99,000Begin by identifying the accounting equation and the formula expressed by the statement of​ owner's equity​ (the "equity​equation"): ​(Abbreviation used: Account.​ = Accounting.)Account. equation: =Equity equation: =For each of the following situations that occurred in June, 2018 with regard to own-er’s contributions and withdrawals, compute the amount of net income or net loss during June 2018.​(Use a minus sign or parentheses for a net​loss.)a. The owner contributed $25,000 to the business and made no withdrawals.Net income(loss) = $b. The owner made no contributions. The owner withdrew cash of $7,500.Net income(loss) = $c. The owner made contributions of $35,000 and withdrew cash of $22,000.Net income (loss) = $

Answer 1

Answer:

a. $7,000

b. $39,500

c. $19,000

Explanation:

a. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities - contribution) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 - $25,000) - ($211,000 - $133,000)

= $85,000 - $78,000

= $7,000

b. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities + cash withdrawn) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 + $7,500) - ($211,000 - $133,000)

= $117,500 - $78,000

= $39,500

c. The computation of the net income or net loss is shown below:

= (June 30,2018 assets - June 30,2018 liabilities + cash withdrawn - contribution) - (May 31,2018 assets - May 31,2018 liabilities)

= ($209,000 - $99,000 + $22,000 - $35,000) - ($211,000 - $133,000)

= $97,000 - $78,000

= $19,000