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Capital account balance
As of January 1, Terrace Waters, Capital had a credit balance of $500,000. During the year, withdrawals totaled $10,000, and the business incurred a net loss of $320,000.
a. Compute the balance of Terrace Waters, Capital as of the end of the year.
b. Assuming that there have been no recording errors, will the balance sheet prepared at December 31 balance? Explain.
(a)
Capital account:
Capital is the amount invested by the owner for the business. A capital account is one of the ledger accounts which are used to record the amount paid in to the company by the investors. The capital account shows a normal balance of credit.
To compute: The balance of T’s capital for the end of the year.
Hence, the capital account shows a
(b)
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