Question

if N lekin's beginning capital balance shown on a statement of owner's equity is 100,000. net income for the period is

Answer 1

$125,000

Explanation:

The computation of the owner's capital balance at the end of the period is shown below:-

Owner's Capital balance at the end = Capital balance in the beginning + Additional investments + Net Income - Withdrawals

= $100,000 + 0 + $50,000 - $25,000

= $125,000

Therefore for computing the owner's capital balance at the end we simply applied the above formula.