ABC Restaurant Pty Ltd started the year with total assets of $90 000 and total liabilities of $40 000.During the year the business earned $100 000 in income and incurred $55 000 in expenses.Dividends paid were $10 000.
Equity at the end of the period was:
A)$50 000.
B)$85 000.
C)$35 000.
D)$45 000.

Question

Quizplus · Accepted Answer

Equity at the end of the period can be calculated as:
Equity = Total Assets - Total Liabilities
Equity = ($90,000 + $100,000 - $55,000) - $40,000 - $10,000
Equity = $135,000 - $50,000
Equity = $85,000
Therefore, the answer is choice B.

ABC Restaurant Pty Ltd Started the Year with Total Assets