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10 June, 11:06

Determine the net income. The owner's equity at the beginning of the period is $20,000. The owner made cash withdrawals that total $7,000. At the end of the period the owner's equity is $37,000.

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  1. 10 June, 11:27
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    The equation of owners equity is revenue minus expenses. So basically in this question,

    (Owner's Equity at the beginning of the period) $20,000 + (Revenue/Net income) $ * - (Drawings/Cash Withdrawal) $7,000 = (Owner's Equity at the end of period) $37,000

    Using the above formula, solving gives, Net Income: $24,000
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