Calculation of net profit by analyzing changes to assets and liabilities.

ABC Company reports the following balance sheet information for 1997:

1 January 1997
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Assets: $60,000
Liabilities: $12,000

31 December 1997
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Assets: $70,000
Liabilities: $14,000

Assume that new investments made by owners during 1997 were $3,000 and that withdrawals were $12,000. Find the net profit for 1997.

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... $12,000
= $48,000

Calculate owner's equity at 31 Dec 1997

Assets = Owner's Equity + Liabilities
OE = A - L
OE ...