The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital was $90,000.

Question

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The ending balance should be $86,000, calculated as $10,000 (beginning balance) + $200,000 (revenues) - $120,000 (expenses) - $4,000 (withdrawals).

The Beginning Balance in the Capital Account of a Company