Question

The beginning capital balance is $5,000; there are no additional investments or withdrawals by the owner during the accounting period. The period's revenue is $1,600 and expenses total $1,700. What is the ending capital balance (after closing entries)?

a. $3,900
b. $4,900
c. $5,900
d. $6,900

Answer 1

After calculating the revenues and expenses from the beginning capital balance, the ending capital balance would be $4,900.

Step-by-step explanation:

The question you've asked concerns calculating the ending capital balance for a business after recording its revenue and expenses. The beginning capital balance is given as $5,000, with revenues of $1,600 and expenses amounting to $1,700. No additional investments or withdrawals have been made during the period. To get the ending capital balance, you would subtract the total expenses from the total revenues and then adjust the beginning capital balance accordingly.

To do the calculation: $5,000 (beginning balance) + $1,600 (revenue) - $1,700 (expenses) = $4,900 (ending balance). Therefore, the correct answer is b. $4,900.