Asked by Elizaveta Alagoz on May 17, 2024

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Letty Company began the year with owner's equity of $105000. During the year Letty received additional owner investments of $147000 recorded expenses of $420000 and had owner drawings of $28000. If Letty's ending owner's equity was $290000 what was the company's revenue for the year?

A) $458000.
B) $486000.
C) $605000.
D) $633000.

Owner's Equity

Owner's equity represents the owner's claim to the assets of a business after all liabilities have been subtracted.

Owner Investments

Owner investments, also known as owner contributions, refer to money or other assets that owners put into their business for its use.

Revenues

The total income generated from normal business operations and other activities before any expenses are subtracted.

  • Work out the owner's shareholding value, digging into components including income after expenses, external funding, and private withdrawals.
  • Calculate the bottom line by offsetting expenses against revenues.
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SM
Sydney MoodyMay 21, 2024
Final Answer :
B
Explanation :
The company's revenue can be calculated using the owner's equity formula: Ending Owner's Equity = Beginning Owner's Equity + Owner Investments + Revenues - Expenses - Owner Drawings. Plugging in the given values: $290,000 = $105,000 + $147,000 + Revenues - $420,000 - $28,000. Solving for Revenues gives $486,000.