A business has Beginning capital of $100 000. During the year, sales revenues were $20 000, Sales returns and allowances were $300, Sales discounts were $700, Cost of sales were $12 000, and all other expenses totaled $4 500. $1 000 of drawings were taken. The ending balance in Capital, after closing entries, would be:
A)$101 500.
B)$98 500.
C)$119 000.
D)$1 500.

Question

Quizplus · Accepted Answer

The ending capital is calculated as: Beginning capital ($100,000) + Net income (Sales revenues $20,000 - Sales returns $300 - Sales discounts $700 - Cost of sales $12,000 - Other expenses $4,500) - Drawings ($1,000) = $101,500.

A Business Has Beginning Capital of $100 000