On January 1, 2012, Lee Inc

Accounting Dec 16, 2020

On January 1, 2012, Lee Inc. reported owner's equity of $130,000. During the year they experienced a net loss of $30,000 and owner's drawings of $20,000.

On December 31, 2012, the amount in owner's equity is:

a. $130,000

b. $140,000

c. $180,000

d. $80,000

Expert Solution

Option d. is correct

Data Provided:

Owner's equity at begining = $130,000
Net loss = $30,000
Withdrawl = $20,000

Owner's equity can be calculated as

Owner's equity = Owner's equity at begining - Net loss - Withdrawls

Owner's equity = $130,000 - $30,000 - $20,000

Owner's equity = $80,000

On December 31, 2012, the amount in owner's equity is $80,000.

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