At the beginning of 2009, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During 2009, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be:

Question

Ishaan Wiggins

Business

27 March, 22:41

At the beginning of 2009, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During 2009, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be:

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Davon Case · Answer 1

Ending capital = $46,000

Explanation:

Given,

Total Assets = $125,000;

Total Liabilities = $75,000; and

Owner's Capital = $50,000.

Revenues = $46,000;

Expenses = $30,000;

Withdrawals = $20,000;

During 2009,

We know,

Net Income = (Revenue - Expenses)

Net Income = $ (46,000 - 30,000)

Net Income = $16,000

The end of 2009

Beginning Capital = $50,000

Add: Net profit = 16,000

Less: Drawings = (20,000)

Ending capital = $46,000