Question

After introducing $10,000 of her savings, an equipment worth $2,500, and obtaining a bank loan of $1,000, what is Joanne's Capital account following these transactions?

Answer 1

Joanne's Capital account, after introducing $10,000 of her savings, an equipment worth $2,500, and obtaining a $1,000 bank loan, is $12,500.

Step-by-step explanation:

The student's question is related to determining Joanne's Capital account following certain financial transactions.

To calculate Joanne's capital, we have to consider all her contributions to the business and any liabilities.

In this case, Joanne introduced $10,000 of her savings, an equipment worth $2,500, and she also obtained a bank loan of $1,000. Joanne's capital account will be the sum of her contributions minus any liabilities.

Since the bank loan is a liability, it will not be added to the capital account.

To calculate Joanne's Capital account, the calculation would be as follows:

So, the total value in Joanne's Capital account after these transactions would be:

$10,000 (savings) + $2,500 (equipment) = $12,500.