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Accounting Problem - Please Help!?
December 31, 2010
Assets $ 41,000
Liabilities 33,620
December 31, 2011
Assets 44,000
Liabilities ?
During year 2011
Owner investments 6,000
Net income (loss) 9,920
Owner cash withdrawals 3,500
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What is the liability (show math)...
Hello, the business did not lose 9,920 since it is not in paranthesis.
Your answer helped me to figure it out, thanks!
1 Answer
- Maulik BhattLv 510 years agoFavorite Answer
Assets = Liabilities + Capital
As of December 2010, the capital must be (41,000-33,620) $7,380. In 2011, the owner added $6,000 and withdrew $3,500. The business also lost $9,920. So, the owner's capital is -40 $.
Putting this in our equation,
44,000 = x -40
Solving for x, x = 44,040.