The beginning capital balance is $5,500,there are no additional investments but the owner did withdraw $500 during the accounting period.The period's revenue is $4,000 and expenses total $6,000.What is the ending capital balance (after closing entries)?
A)$5,500
B)$6,000
C)$3,500
D)$3,000

Question

Quizplus · Accepted Answer

Beginning capital balance = $5,500
Additional investments = $0
Withdrawals = $500
Revenue = $4,000
Expenses = $6,000

Net loss = Expenses - Revenue = $6,000 - $4,000 = $2,000

Ending capital balance = Beginning capital balance + Additional investments - Withdrawals + Net income/loss
= $5,500 + $0 - $500 - $2,000
= $3,000

Therefore, the ending capital balance (after closing entries) is $3,000, which is choice D.

The Beginning Capital Balance Is $5,500,there Are No Additional Investments