At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During the year, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during the year totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be:

Question

Nixon

Business

21 July, 18:50

At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During the year, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during the year totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of the year would be:

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Sneakers · Answer 1

The answer is: Equity at the end of the year will be $123,000

Explanation:

At the beginning of the year the balance sheet was as following:

assets $195,000 liabilities $75,000

equity $ 120,000

Then during the year the income statement is:

total revenues $226,000 total expenses $175,000 net income $ 51,000 (this increases assets and equity)

If the owners withdrew $48,000, then cash and equity will decrease.

The ending balance for the year:

assets $195,000 + $51,000 liabilities $75,000

-$48,000 = equity $120,000 + $51,000 - $48,000 =

$198,000 $123,000