The beginning balance in the Lopez, Capital account of a company was $ 13 comma 000. The revenues and expenses were $ 220 comma 000 and $ 150 comma 000 , respectively. During the year, Lopez took withdrawals of $ 5 comma 000. There were no new capital contributions during the year. The ending balance in Lopez, Capital was $ 83 comma 000.

a. True.

b. False.

Question

Business

Elian Middleton

29 March, 01:21

The beginning balance in the Lopez, Capital account of a company was $ 13 comma 000. The revenues and expenses were $ 220 comma 000 and $ 150 comma 000 , respectively. During the year, Lopez took withdrawals of $ 5 comma 000. There were no new capital contributions during the year. The ending balance in Lopez, Capital was $ 83 comma 000.

a. True.

b. False.

+5

Answers (1)

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Peyton Santiago · Answer 1

a. True

Explanation:

The capital account of a soul proprietor is similar to the equity account of a company. It shows how much the business owes the owner.

This includes the amount invested and net income over the years posted as part of the retained earnings.

Net income is the difference between the total revenue and total expenses.

Net income = $220,000 - $150,000

= $70,000

Net balance in capital account = $13,000 + $70,000

= $83,000