At the End of Its First Year of Operations, Shapiro's

question 19

Multiple Choice

At the end of its first year of operations, Shapiro's Consulting Services reported net income of
$27,000. They also had account balances of: Cash, $16,000; Office Supplies, $3,200, Equipment,
$24,000 and Accounts Receivable, $8,000. The owner's total investment for this first year was
$15,000 and the owner withdrew $2,000 for personal use. Calculate the ending balance to be reported on the Statement of Owner's Equity in the Owner's Capital account.

• A)$40,000
• B)$42,200
• C)$58,000
• D)$27,000

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Definitions:

Wages

Monetary compensation paid by an employer to an employee in exchange for work performed.

Total Loss

The situation in which the cost of repairing a damaged asset exceeds its value, or when an asset is completely destroyed or lost.

Firm

An organization or business entity engaged in commercial, industrial, or professional activities.

Firm's Output

The aggregate amount of products or services a company generates within a given timeframe.