Net income for O'Neal Company is $25,000 for the current year. The owner withdrew $3,000 per month for personal living expenses. The owner's capital account will show a net:
A)decrease of $25,000.
B)increase of $22,000.
C)decrease of $11,000.
D)increase of $11,000.

Question

Quizplus · Accepted Answer

The owner's capital account will decrease by the total withdrawals for the year, which is $3,000 per month times 12 months, equaling $36,000. The net income is $25,000, so the net change in the capital account is $25,000 - $36,000 = -$11,000, indicating a decrease of $11,000.

Net Income for O'Neal Company Is $25,000 for the Current