Answer:
Wizco Advertising
Using the accounting equation of Assets = Liabilities + Equity:
a. The owner contributed $10,000 to the business and made no withdrawals:
Computation of net income or loss during June 2018:
Assets = Liabilities + Capital + Net Income or Loss
$66,000 = $144,000 + 10,000 - 88,000
Net loss of $88,000
b. The owner made no contributions. The owner withdrew cash of $3,000.
Computation of net income or loss during June 2018:
Assets = Liabilities + Capital + Net Income or Loss
$66,000 = $144,000 - 3,000 - 75,000
Net loss of $75,000
c. The owner made contributions of $12,500 and withdrew cash of $30,000.
Computation of net income or loss during June 2018:
Assets = Liabilities + Capital + Net Income or Loss
$66,000 = $144,000 + 12,500 - 30,000 - 60,500
Net loss of $60,500
Explanation:
a) Data and Calculations:
May 31, 2018 June 30, 2018
Total Assets $ 122,000 66,000
Total Liabilities $ 287,000 144,000
Capital 10,000
Net Loss (88,000)
b) Assets $66,000
Liabilities 144,000
Drawings (3,000)
Net loss (75,000)
c) Assets $66,000
Liabilities 144,000
Capital 12,500
Drawings (30,000)
Net loss (60,500)
