Metropolitan Casting Services Started the Year with Total Assets of $130,000

question 203

Multiple Choice

Metropolitan Casting Services started the year with total assets of $130,000 and total liabilities of $60,000.The company is a sole proprietorship.The revenues and the expenses for the year amounted to $130,000 and $50,000,respectively.During the year,there were no new capital contributions and the owner withdrew $60,000.Calculate the amount of increase or decrease in owner's equity for the year.

• A) a $20,000 increase
• B) a(n) $90,000 increase
• C) a(n) $70,000 decrease
• D) a $60,000 increase

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Definitions:

Straight-Line Method

A depreciation technique where an equal amount of depreciation expense is allocated for each year of the asset's useful life.