Four different proprietorships, Alpha, Bravo, Charlie, and Delta, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner’s equity, are summarized as follows:
|
|
Total |
Total |
|
|
Assets |
Liabilities |
|
Beginning of the year |
$1,350,000 |
$540,000 |
|
End of the year |
2,160,000 |
900,000 |
On the basis of the above data and the following additional information for the year, determine the net income (or loss) of each company for the year. (Hint: First determine the amount of increase or decrease in owner’s equity during the year.)
Alpha: The owner had made no additional investments in the business and had made no withdrawals from the business.
Bravo: The owner had made no additional investments in the business but had withdrawn $120,000.
Charlie: The owner had made an additional investment of $270,000 but had made no withdrawals.
Delta: The owner had made an additional investment of $270,000 and had withdrawn $120,000.