1. The missing amount (Expenses) for Felix Company, using the owner's equity method, is $252,000.
2. Felix suffered a net loss of $47,000 for the year.
A net loss shows that the expenses for the period exceed the revenue.
When the revenue exceeds the expenses for the accounting period, there is a net income.
The income statement is used to report the financial performance of a business for a period, determining its net income or loss.
Assets Liabilities Equity
Beginning 67,000 11,000 56,000
Ending 46,000 34,000 12,000
Owner contribution $11,000
Owner withdrawal 8,000
Revenue 205,000
Expenses ?
Expenses = Revenue - Net Income
Equity:
Beginning equity + contribution - withdrawal + Revenue - Expenses = Ending equity
Equity = $56,000 + 11,000 - 8,000 + 205,000 - x = $12,000
= 272,000 - 8,000 - x = 12,000
= 264,000 - x = 12,000
x = 252,000 (264,000 - 12,000)
Net loss = Revenue - Expenses
= $205,000 - $252,000
= ($47,000)
Thus, Felix Company's expenses for the year exceed the revenue, resulting in a net loss of $47,000.
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