Allen Marks is the sole owner and operator of Great Marks Company. As of the end

Question

Allen Marks is the sole owner and operator of Great Marks Company. As of the end of its accounting period, December 31, 2013, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2014, Allen Marks invested an additional $73,000 and withdrew $33,000 from the business. What is the amount of net income during 2014, assuming that as of December 31, 2014, assets were $995,000, and liabilities were $270,000?

a.

$ 45,000

b.

$ 50,000

c.

$106,000

d.

$370,000

a.

$ 45,000

b.

$ 50,000

c.

$106,000

d.

$370,000

Explanation / Answer

Opening capital $ 640,000 940000-300000 Add: Additional investment $   73,000 Less: withdrawls $   33,000 Add: Net income for 2014 $   45,000 (Balancing figure) Closing capital $ 725,000 995000-270000

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