Barbara Elliott is one of the partners in Elliott & Wan. Her drawings during the year were $10,000. She made an additional capital investment of $5,000 and her share of the loss for the year was $2,000. Her ending capital balance was $40,000. What was Barbara's beginning capital balance?

Question

Quizplus · Accepted Answer

Barbara's beginning capital balance can be calculated by reversing the changes to her capital during the year. Her ending capital balance was $40,000, after accounting for her drawings ($10,000), additional capital investment ($5,000), and her share of the loss ($2,000). To find the beginning balance, add the drawings and the loss to the ending balance, and then subtract the additional investment: $40,000 + $10,000 + $2,000 - $5,000 = $47,000.

Barbara Elliott Is One of the Partners in Elliott