Question

an investor has a q1 beginning balance of $120. if there is a $30 capital call, $10 distribution and no other profit/loss changes, what is the ending balance for the period?

Answer 1

The ending balance of the investor's account, after accounting for a $30 capital call and a $10 distribution, is $140.

Step-by-step explanation:

To calculate the ending balance of an investor's account, you need to start with the beginning balance and then adjust for any capital calls, distributions, and profit/loss changes within the period. In this case, the beginning balance is $120. A $30 capital call, which is an additional investment requested from the investor, increases the balance, while a $10 distribution, money given back to the investor, reduces the balance. Since there are no other changes such as profit or loss, the calculation for the ending balance will be as follows:

Beginning balance: $120

+ Capital call: $30

- Distribution: $10

= Ending balance: $140

Answer 2

The investor's ending balance is calculated by subtracting the $30 capital call from the beginning balance of $120 and adding the $10 distribution, resulting in an ending balance of $100.

Step-by-step explanation:

If an investor starts with a Q1 beginning balance of $120, experiences a $30 capital call, and receives a $10 distribution, we need to calculate the ending balance for the period considering these transactions.

To find the ending balance, you start with the beginning balance and then apply the transactions by subtracting the capital call and adding back any distributions. Here's how the calculation works:

• Beginning balance: $120
• Capital Call: -$30 (when capital is called, it represents a cash outflow from the investor's perspective)
• Distribution: +$10 (distributions represent a cash inflow to the investor)
• Ending balance: $120 - $30 + $10 = $100

Therefore, the ending balance for the investor at the end of the period would be $100.