Wiley Hill opened Hill's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:

Wiley invested $25,000 cash in the business.
Wiley contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March. The company received $16,000 cash for repair services provided during March. The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account.
The company paid cash of $500 for utilities for the month of March.
The company received $3,100 cash in advance from a customer for repair services to be provided in April.
Wiley withdrew $5,000 for his personal use from the company.
Based on this information, the balance in Wiley Hill, Capital reported on the Statement of Owner's Equity at the end of March would be:
A) $13,500.
B) $8,400.
C) $133,400.
D) $130,300.
E) $125,300.

Question

Wiley Hill opened Hill's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:

Wiley invested $25,000 cash in the business.
Wiley contributed $100,000 of equipment to the business.
The company paid $2,000 cash to rent office space for the month of March. The company received $16,000 cash for repair services provided during March. The company paid $6,200 for salaries for the month of March.
The company provided $3,000 of services to customers on account.
 The company paid cash of $500 for utilities for the month of March.
The company received $3,100 cash in advance from a customer for repair services to be provided in April.
Wiley withdrew $5,000 for his personal use from the company.
Based on this information, the balance in Wiley Hill, Capital reported on the Statement of Owner's Equity at the end of March would be:
A) $13,500.
B) $8,400.
C) $133,400.
D) $130,300.
E) $125,300.

Quizplus · Accepted Answer

The balance in the Wiley Hill, Capital account can be determined by calculating the initial investment plus net income or minus net loss, and subtracting any withdrawals. 
Initial investment = $25,000 cash + $100,000 equipment = $125,000
Net income = Revenue – Expenses
Revenue = $16,000 cash + $3,000 on account + $3,100 in advance = $22,100
Expenses = $2,000 rent + $6,200 salaries + $500 utilities = $8,700
Net income = $22,100 - $8,700 = $13,400
Wiley's withdrawal = $5,000
Therefore, the ending balance in the Wiley Hill, Capital account would be: 
$125,000 (initial investment) + $13,400 (net income) - $5,000 (withdrawal) = $133,400. 
Therefore, the correct answer is D, $130,300.

Wiley Hill Opened Hill's Repairs on March 1 of the Current