The income summary account had an $8,000 credit balance prior to being closed to the owner's capital account. The capital account had a $32,000 beginning balance and a $36,500 ending balance. Determine the amount of the owner's withdrawals during the current period.
A)$3,500
B)$8,500
C)$4,500
D)$2,500

Question

Quizplus · Accepted Answer

The income summary account had an $8,000 credit balance prior to being closed to the owner's capital account. This means that the owner's capital account increased by $8,000 during the current period. The capital account had a $32,000 beginning balance and a $36,500 ending balance. This means that the owner withdrew $3,500 during the current period ($36,500 - $32,000 - $8,000 = $3,500).

The Income Summary Account Had an $8,000 Credit Balance Prior