Use the following information for questions 144-146.
Stahl Consulting started the year with total assets of $20,000 and total liabilities of $5,000. During the year, the business recorded $16,000 in catering revenues and $8,000 in expenses. Stahl made an additional investment of $3,000 and withdrew cash of $5,000 during the year.
-The owner's equity at the end of the year was
A) $21,000.
B) $18,000.
C) $8,000.
D) $2,000.

Question

Quizplus · Accepted Answer

The owner's equity at the beginning of the year was $15,000 ($20,000 assets - $5,000 liabilities). During the year, net income was $8,000 ($16,000 revenues - $8,000 expenses). With an additional investment of $3,000 and a withdrawal of $5,000, the ending owner's equity is $21,000 ($15,000 + $8,000 + $3,000 - $5,000).

Use the Following Information for Questions 144-146