Question

Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

1. Andrea invested $13,900 cash in the business.
2. Andrea contributed $24,000 of photography equipment to the business.
3. The company paid $2,500 cash for an insurance policy covering the next 24 months.
4. The company received $6,100 cash for services provided during January.
5. The company purchased $6,600 of office equipment on credit.
6. The company provided $3,150 of services to customers on account.
7. The company paid cash of $1,900 for monthly rent.
8. The company paid $3,500 on the office equipment purchased in transaction #5 above.
9. Paid $315 cash for January utilities.

Based on this information, the balance in the A. Apple, Capital account reported on the Statement of Owner's Equity at the end of the month would be:_______

Answer 1

The balance in the A. Apple, Capital account at the end of January for Apple Photography is calculated by adding the owner's investments and revenues and subtracting the expenses. After accounting for all the transactions, the ending balance in the capital account is $41,435.

Step-by-step explanation:

To calculate the balance in the A. Apple, Capital account at the end of January for Apple Photography, we need to consider the transactions that affect owner's equity. Here is the summary of the transactions relevant to the capital account:

The company provided $3,150 of services to customers on account. The company paid cash of $1,900 for monthly rent.

Additions to the capital account:

Services provided on account: $3,150

Payment on office equipment: $3,500

Utilities: $315

Total subtractions: $1,900 + $3,500 + $315 = $5,715

Therefore, the ending balance in the A. Apple, Capital account is calculated as follows:

Beginning balance ($0 as the business started this year) + Additions ($47,150) - Subtractions ($5,715) = $41,435

Answer 2

$44,935

Step-by-step explanation:

Apple Photography's capital account should include:

cash invested ($13,900) + photography equipment ($24,000) + sales revenue ($6,100 cash + $3,150 on account) - insurance policy ($2,500) - rent ($1,900) - utilities ($315) = $44,925

Office equipment purchased on credit and the partial payment of the debt are not included in the calculation of the capital account.