Hi I'm new to accounting and it's my elective subject in college. I have a question that I am not sure of and I hope someone is able to assist me.
"Quinlan Company starts the year with $50,000 in assets and $40,000 in liabilities. Profit for the year is $12,500 and no dividends are paid. How much is the owner's equity at the end of the year?"
My attempt to this question is, I took $50,000 - $40,000= $10,000 (the equity at the beginning of the year)
Then i took $10,000 + $12500 = $22,500 (the equity at the end of the year)
I am not sure whether I attempt this correctly. Please assist me. Thank you.
"Quinlan Company starts the year with $50,000 in assets and $40,000 in liabilities. Profit for the year is $12,500 and no dividends are paid. How much is the owner's equity at the end of the year?"
My attempt to this question is, I took $50,000 - $40,000= $10,000 (the equity at the beginning of the year)
Then i took $10,000 + $12500 = $22,500 (the equity at the end of the year)
I am not sure whether I attempt this correctly. Please assist me. Thank you.
