Tarr, a sole proprietorship, had the following balances and transactions during 2016: beginning capital, $40,000; contribution of cash to the business by the owner, $15,000; revenue, $60,000; expenses, $35,000; withdrawal by the owner, $5,000.What is the amount of the ending capital balance?
A) $40,000
B) $60,000
C) $75,000
D) $85,000

Question

Quizplus · Accepted Answer

The ending capital balance is calculated as follows: Beginning capital ($40,000) + Owner's contribution ($15,000) + Revenue ($60,000) - Expenses ($35,000) - Owner's withdrawal ($5,000) = $75,000.

Tarr, a Sole Proprietorship, Had the Following Balances and Transactions