If equity at the beginning of the period is $100,000 and at the end of the period is $90,000 and additional capital of $20,000 is paid into the business by the owner during the period,profit or loss is:
A) profit $10,000.
B) loss $30,000.
C) loss $10,000.
D) profit $30,000.

Question

Quizplus · Accepted Answer

The equity decreased from $100,000 to $90,000, a decrease of $10,000. However, since an additional $20,000 was injected into the business, this means the actual loss is $30,000 to offset the capital injection and still end up with a lower equity.

If Equity at the Beginning of the Period Is $100,000