At September 1 2016 Hotel Suites Co. reported owner's capital of $147000. During the month Hotel Suites generated revenues of $48000 incurred expenses of $26000 purchased equipment for $5000 and withdrew cash of $3000. What is the amount of owner's capital at September 30 2016?

Question

Quizplus · Accepted Answer

The owner's capital at the end of the month is calculated by adding the net income (revenues minus expenses) and subtracting withdrawals from the initial owner's capital. Net income is $48000 - $26000 = $22000. The change in owner's capital is $22000 - $3000 = $19000. Therefore, the owner's capital at September 30, 2016, is $147000 + $19000 = $166000.