During 2016 its first year of operations Aida's Bakery had revenues of $65000 and expenses of $35000. The business had owner's drawings of $22000. What is the amount of owner's equity at December 31 2016?
A) $0
B) $8000 credit
C) $30000 credit
D) $22000 debit

Question

Quizplus · Accepted Answer

Owner's equity is calculated as: Beginning Equity + Net Income - Drawings. Since it's the first year, beginning equity is $0. Net Income = Revenues - Expenses = $65000 - $35000 = $30000. Owner's Equity = $0 + $30000 - $22000 = $8000 credit.

During 2016 Its First Year of Operations Aida's Bakery Had