I need the correct answer to this general accounting problem using the standard accounting approach. Nova Services, a sole proprietorship, began the year with total assets of$160,000 and liabilities of $65,000. Revenues during the year were$125,000 and expenses totalled $75,000. The owner made no capitalcontributions but withdrew $30,000 during the year.What is Nova's net income?

Step 1: Definition of Net IncomeNet income is the excess of revenues over expenses during a specific…

Answered: Nova Services, a sole proprietorship,…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter12: Corporations: Organization, Capital Structure, And Operating Rules

Section: Chapter Questions

Problem 12P

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Nova Services, a sole proprietorship, began the year with total assets of $160,000 and liabilities of $65,000. Revenues during the year were $125,000 and expenses totalled $75,000. The owner made no capital contributions but withdrew $30,000 during the year. What is Nova's net income?