2) Determine the ending owner's equity of a business having a beginning owner's equity of$10,227, additional investments of $4,533, withdrawals of $1,210, and revenue of $8,254, and expenses before adjustment amounted to $273. The adjustments totaled $6,291. Explain your answer (in 300 words).
Let's just follow this through with the info provided above in a logical manner:
- we begin with equity of $10,227
- to that, we add additional equity in the form of new investments totaling $4533
- now we have $14,760 in total equity
- then we subtract withdrawals of $1210
- resulting in an adjusted balance of $13,550
These calculations define in and out movement relating to transactions which affect the equity value of a firm.