Requirement 1. Compute the missing amount for Leahy Company. You will need to work through owner's equity.
Begin by working through owner's equity. Rework the accounting equation and then solve for owner's equity ("equity") at the beginning and end of the period.
|
Save Accounting Table...
|
+
|
|
Copy to Clipboard...
|
+
|
|
|
Assets
|
-
|
Liabilities
|
=
|
Equity
|
|
Beginning
|
68000
|
-
|
55000
|
=
|
13000
|
|
Ending
|
83000
|
-
|
32000
|
=
|
|
Identify the formula to show the change in equity and then complete the calculation to solve for the missing expenses for the period. (For accounts with a $0 balance, make sure to enter "0" in the appropriate column. Abbreviations used: Contributions = Owner contribution; Withdrawals = Owner withdrawal; Capital, Beg. = Capital, Beginning.)
|
Save Accounting Table...
|
+
|
|
Copy to Clipboard...
|
+
|
|
Capital, Beg.
|
+
|
Contributions
|
-
|
Withdrawals
|
+
|
Revenues
|
-
|
Expenses
|
=
|
Capital, Ending
|
|
|
+
|
9000
|
-
|
15000
|
+
|
|
-
|
|
=
|
|
Requirement 2. Did Leahy earn a net income or suffer a net loss for the year? Compute the amount.
Identify the formula and then solve for Leahy's net income or loss for the period. (Use parentheses or a minus sign for a netloss.)