What is the Increase in Owner's Equity for the year on Rocky’s Day Spa?

What is the Increase in Owner's Equity for the year on Rocky’s Day Spa?

• A. 38,170
• B. 55,625
• C. 17,455
• D. 20,000

Answer: (C)

The increase in Owner's Equity for a year comes from net income plus any owner investments minus any withdrawals. If the problem shows net income of 17,455 and there are no owner investments or withdrawals reported, the increase in equity equals 17,455. The other options would require additional contributions or withdrawals or a different net income figure that isn’t indicated by the data.

The increase in Owner's Equity for a year comes from net income plus any owner investments minus any withdrawals. If the problem shows net income of 17,455 and there are no owner investments or withdrawals reported, the increase in equity equals 17,455. The other options would require additional contributions or withdrawals or a different net income figure that isn’t indicated by the data.