Tarr,a sole proprietorship,had the following balances and transactions during 2017: 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?

Question

Quizplus · Accepted Answer

The ending capital balance can be calculated using the following formula:
Ending Capital = Beginning Capital + Owner Contributions + Revenue - Expenses - Owner Withdrawals

Plugging in the numbers from the question:
Ending Capital = $40,000 + $15,000 + $60,000 - $35,000 - $5,000
Ending Capital = $75,000

Therefore, the correct answer is C) $75,000.

Tarr,a Sole Proprietorship,had the Following Balances and Transactions During 2017