Respuesta :
The ending owner’s capital balance after closing is $382,300.
The company had a net profit for the year of $91,300. This is calculated by subtracting expenses from net income. $205,000-$113,700 = $91,300.
In order to calculate the the ending owner’s capital for the year the accountant will add the net income to the starting owner’s equity, and then subtract the amount that the owner withdrew from the business.
Starting owner’s equity ($317,000 ) + net income ($91,300) = $408,300 and then subtract the amount withdrawn ($26,000) = $382,300, which is the ending owner’s equity balance.
Answer:
$382,300
Explanation:
Given:
Annual revenue = $205,000
Annual expenses = $113,700
Withdrew amount = $26,000
Owner capital = $317,000
Computation of net profit :
Net profit = Annual revenue - Annual expenses
Net profit = $205,000 - $113,700
Net profit = $91,300
Computation of owner's capital balance after closing:
Owner's capital balance after closing = Owner capital + Net profit - Withdrew amount
Owner's capital balance after closing = $317,000 + $91,300 - $26,000
Owner's capital balance after closing = $382,300
