If equity at the beginning of the period is $45,000 and at the end of the period is $56,000 and $20,000 is withdrawn by the owner during the period, calculate profit. (Use the stock approach.)
A)$1,000.
B)$41,000.
C)$76,000.
D)$31,000.

Question

Quizplus · Accepted Answer

Using the stock approach formula:
Equity at end = Equity at beginning + profit - withdrawals
$56,000 = $45,000 + profit - $20,000
$56,000 = $25,000 + profit
Profit = $56,000 - $25,000
Profit = $31,000
Therefore, the answer is D.

If Equity at the Beginning of the Period Is $45,000