Question

Se the following account balances from the adjusted trial balance of Gees Catering:

Account Debit Balance Credit Balance
Cash 10,000
Accounts Payable 2,000
R. Gees, Drawing 1,000
R. Gees, Capital 18,000
Fees Revenue 10,000
Salary Expense 7,000
Rent Expense 6,000
Supplies Expense 6,000

What is the amount that Gees Consulting would report as the ending balance in the R. Gees, Capital account at the end of the year?

Answer 1

The amount that Gees Consulting would report as the ending balance in the R. Gees, Capital account at the end of the year is $8,000

Step-by-step explanation:

For computing the ending balance of capital account, first, we have to compute the net income or loss which is shown below:

Net income/loss = Fees revenue - salary expense - rent expense - supplies expense

= $10,000 - $7,000 - $6,000 - $6,000

= ($19,000)

Now the ending balance would be

= Opening capital - net loss - drawings

= $18,000 - $9,000 - $1,000

= $8,000