The assets of Lee’s business increased by $40,000 and theliabilities increased by $5,000 during...

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Accounting

The assets of Lee’s business increased by $40,000 and theliabilities increased by $5,000 during the current year. If theprofit for this period was $25,000, what additional contribution orwithdrawal was made by the owner? (Assume only a withdrawal or acontribution was made).
Select one: a. Contribution $5,000 b. Drawings $5,000 c.Drawings $10,000 d. Contribution $10,000

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Solution Answer is d Contribution 10000 Working Notes This Question is based on Accounting Equation Total assets Total liabilities Equity or Capital See Answer

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In: AccountingThe assets of Lee’s business increased by $40,000 and theliabilities increased by $5,000 during the...The assets of Lee’s business increased by $40,000 and theliabilities increased by $5,000 during the current year. If theprofit for this period was $25,000, what additional contribution orwithdrawal was made by the owner? (Assume only a withdrawal or acontribution was made).Select one: a. Contribution $5,000 b. Drawings $5,000 c.Drawings $10,000 d. Contribution $10,000