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Q.12 The owner’s equity balance of LL-company showed an increase in Br. 900,000 for the year 2018. You are provided with the following additional information: Additional investments made during the year Br. 480,000 Withdrawals during the year amounted to 35% of investment Expenses incurred during the year: Salaries Expenses 74,500 Advertising Expenses 42,000 Utilities expenses 50,000 Depreciation Expenses 80,000 Transportation Expenses 35,000 Required: (a) Calculate the revenues generated in 2018. (b) Calculate the net income or net loss for the year 2018.

Sagot :

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a) The revenues generated in 2018 were Br. 800,025.

b) The net income for the year 2018 was Br. 518,525.

What is the increase in owner's equity?

The owner's equity increases with the following factors:

  • Increased capital contribution.
  • Higher profits
  • Increased sales
  • Decreased expenses.

Data and Calculations:

Increase in Owner's Equity = Br. 900,000

Additional investments = Br. 480,000

Withdrawals = 35% of investment expenses

= Br. 98,525 (35% x Br. 281,500)

Salaries Expenses 74,500

Advertising Expenses 42,000

Utilities expenses 50,000

Depreciation Expenses 80,000

Transportation Expenses 35,000

Total investment expenses = Br. 281,500

Net income (loss) = Br. 518,525 (Br. 900,000 -480,000 + 98,525)

Revenues = Br. 800,025 (Br. 518,525 + 281,500)

Thus, while the revenues generated in 2018 were Br. 800,025, the net income for the year 2018 was Br. 518,525.

Learn more about changes in owners' equity at https://brainly.com/question/16929993

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