Determine Net Income for the Period If Beginning Owner's Equity

question 109

Multiple Choice

Determine net income for the period if beginning owner's equity is $20,000, cash withdrawals by the owner amount to $7,000, and ending owner's equity is $37,000.

• A)$10,000
• B)$27,000
• C)$24,000
• D)$13,000

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Definitions:

C-corp

A legal structure for a corporation in which the owners or shareholders are taxed separately from the entity, standardized by U.S. federal law.

Government Body

An organization or a group of people that has the authority to make and enforce rules, laws, and regulations within a specific area.

Vesting

The concept of imposing equity forfeitures on cofounders over a certain period of time on a piecemeal basis should they not stay with the company.

Equity Forfeitures

Situations where shareholders or stockholders must give up their ownership stakes, often due to contractual agreements or failure to meet certain conditions.