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Hollywood Talent Services is a sole proprietorship operated by Phil Morris. The net income of Hollywood Talent Services is $23,000 for the year. The beginning and ending Morris, Capital account was $33,000 and $50,000, respectively. During the year, there were no new capital contributions. Calculate the amount of the owner's withdrawals for the year. Selected Answer: $6,000 Correct Answer: $6,000

Respuesta :

Answer:

$6,000

Explanation:

As we know that  

Ending balance of capital account = Beginning balance of capital account + net income - the withdrawn amount  

$50,000 = $33,000 + $23,000 - the withdrawn amount  

$50,000 = $56,000 - the withdrawn amount  

So, the withdrawn amount would be $6,000

We simply applied the above formula in order to find out the owner's withdrawals for the year.

Answer:$6000

Explanation:

Assets = Capital+Liabilities

Capital can be broken into Closing Capital=Opening capital +profits-drawings+additional capital

Mathematically Drawings= Opening capital+Profits+Addittional Capital-Closing Capital

Drawings=$33000+$23000+0(additional capital)-$50000

                               =$6000