The beginning balance in the Sanchez,Capital account of a company was $10,000.The revenues and expenses were $240,000 and $120,000,respectively.During the year,Sanchez made withdrawals of $7,000.There were no new capital contributions during the year.The ending balance in Sanchez,Capital was $123,000.

Question

Quizplus · Accepted Answer

The ending balance in the capital account is calculated as the beginning balance plus net income (revenues minus expenses) minus withdrawals. Here, $10,000 + ($240,000 - $120,000) - $7,000 = $123,000.

The Beginning Balance in the Sanchez,Capital Account of a Company