Question

The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Sue Harris, Capital account?
Total revenues $ 100,000
Total expenses 48,000
Sue Harris, Capital 64,000
Sue Harris, Withdrawals 12,000

a. $116,000.
b. $52,000.
c. $48,000.
d. $64,000.
e. $104,000.

Answer 1

Answer:

e. $104,000.

Explanation:

The computation of the ending capital balance is shown below:

As we know that

Ending capital balance = Opening capital balance + net income - withdrawn amount

where,

Opening capital balance = $64,000

Net income is

= Revenues - expenses

= $100,000 - $48,000

= $52,000

And, the withdrawn amount is $12,000

So, the ending capital balance i s

= $64,000 + $52,000 - $12,000

= $104,000