If: assets at end of period=$20,000 liabilities at end of period=$11,500 total revenue=$36,900 equity at start of period=$7,400 The amount of expense for the period was what?

Accounting Dec 16, 2020

If:

assets at end of period=$20,000

liabilities at end of period=$11,500

total revenue=$36,900

equity at start of period=$7,400

The amount of expense for the period was what?

Expert Solution

At the end of the period, the equity = Assets(20 00) - Liabilities(11 500) = 8 500. At the beginning of the period the equity was $7 400. That means during the period the equity increased by $1 100($8 500 - $7 400). This is because the entity made profits during the period. The Net Income therefore has to be equal to $1 100. Since net income = Revenue minus all expenses, the expenses are therefore = $36 900 - $1 100 = $35 800.

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