Max's small engine repair shop, a proprietorship Max's Small Engine Repair Shop, a proprietorship, started theyear with total assets of $59,000 and total liabilities of $39,300.During the year, the business recorded $100,800 in repairrevenues, $54,300 in expenses, and Max Freeland, the owner,withdrew $10,300. Max's capital balance at the end of the yearwas:a) $64,600.b) $36,200.c) $45,600.d) $55,900.

Step 1: Define Owns EquityOwner's equity can be defined as the difference between a company's assets…

Answered: Max's Small Engine Repair Shop, a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5PB: Johnson, Incorporated, had the following transactions during the year: Purchased a building for...

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Dynamic Production Services started the year with total assets of $130,000 and total liabilities of $50,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $100,000 and $60,000, respectively. During the year, there were no new capital contributions, and the owner withdrew $45,000. Calculate Dynamic's net income for the year. a. $40,000. b. $100,000. c. $60,000. d. $130,000.
M
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Family Services, a small social service nonprofit agency, began operations on January 1, 20X1, with $40,000 cash and $150,000 worth of equipment, on which $60,000 was owed on a note to City Bank. The equipment was expected to have a remaining useful life of 15 years with no salvage value. During its first year of operations, ending December 31, 20X1, Family Services paid or accrued the following: A. Salaries and other personnel costs, $100,000 B. Rent and utilities, $24,000. C. Debt service: interest, $5,500, and payment on long-term note principal, $10,000 D. Capital outlay: additional equipment purchased January 3, $30,000, expected to last 6 years and have a $6,000 salvage value. E. Other current operating items paid with cash, $4,500. There were no prepayals or unrecorded accruals at December 31, 20X1, and no additional debt was incurred during the year. Required Compute for the Family Services agency, for the year ended December 31,…
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