Total Assets | Total Liabilities
Beginning of the year $550,000 | $215,000
End of the year 844,000 | 320,000
On the basis of the preceding data and the following additional information for the year, determine the net income (or loss) of each company for the year. (Hint: First, determine the amount of increase or decrease in owner’s equity during the year.)
Jupiter: The owner had made no additional investments in the business and had made no withdrawals from the business.
Mars: The owner had made no additional investments in the business but had withdrawn $36,000.
Saturn: The owner had made an additional investment of $60,000 but had made no withdrawals.
Venus: The owner had made an additional investment of $60,000 and had withdrawn $36,000.
Answers:
Jupiter
Owner's equity at end of year ($844,000 – $320,000)................................. $524,000
Deduct owner's equity at beginning of year ($550,000 – $215,000)............ 335,000
Net income (increase in owner’s equity)............................................. $189,000
Increase in owner’s equity (as determined for Jupiter)........................... $189,000
Add withdrawals................................................................................. 36,000
Net income.................................................................................... $225,000
Increase in owner’s equity (as determined for Jupiter)........................... $189,000
Deduct additional investment............................................................... 60,000
Net income.................................................................................... $129,000
Increase in owner’s equity (as determined for Jupiter)........................... $189,000
Deduct additional investment............................................................... 60,000
$129,000
Add withdrawals................................................................................. 36,000
Net income.................................................................................... $165,000
