Lone Psychic Experience is a sole proprietorship established this year. Alice Lone established the firm with capital of $80,600. During the year she withdrew $22,000 as personal salary. Net income before tax for the year is $65,100. Alice's average tax rate for income tax purposes is 25%. Required 1: What is the balance of the equity account in the year end financial statements? $ Required 2: What is the balance of the equity account at the beginning of the first year? $ Required 3: What is the maximum amount Alice can withdraw during the first year of operations? $

Lone Psychic Experience is a sole proprietorship established this year. Alice Lone established the firm with capital of $80,600. During the year she withdrew $22,000 as personal salary. Net income before tax for the year is $65,100. Alice's average tax rate for income tax purposes is 25%. Required 1: What is the balance of the equity account in the year end financial statements? $ Required 2: What is the balance of the equity account at the beginning of the first year? $ Required 3: What is the maximum amount Alice can withdraw during the first year of operations? $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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