Owner's equity and the Accounting equation
Daiichi Company's total assets and liabilities at the beginning and end of the year follow.
|
Assets
|
Liabilities
|
|
Beginning of the year
|
$175,000
|
$ 68,750
|
|
End of the year
|
275,000
|
162,500
|
Determine Daiichi's net income or loss for the year under each of the following alternatives:
1. The owner made no investments in or withdrawals from the business during the year.
2. The owner made no investments in the business but withdrew $27,500 during the year.
3. The owner invested $16,250 in the business but made no withdrawals during the year.
4. The owner invested $12,500 in the business and withdrew $27,500 during the year.