After all appropriate closing entries to the following accounts have been made,what will be the balance in the Jeff Corvette,Capital account?
A) $65,000.
B) $80,000.
C) $130,000.
D) $145,000.
E) $280,000.

Question

After all appropriate closing entries to the following accounts have been made,what will be the balance in the Jeff Corvette,Capital account? 
A) $65,000. 
B) $80,000. 
C) $130,000. 
D) $145,000. 
E) $280,000.

Quizplus · Accepted Answer

Since we do not have access to the accounts, we cannot determine the exact entries that were made. However, we do know that the Jeff Corvette, Capital account is a capital account and its balance represents the owner's equity in the business. As a result, it is affected by the net income or net loss of the business. If the business has a net income, the Jeff Corvette, Capital account will increase, and if it has a net loss, the account will decrease. Therefore, we can assume that the balance in the Jeff Corvette, Capital account will be the sum of the owner's initial investment and any net income earned during the accounting period. 
Based on the answer choices, the only option that is reasonable is D, $145,000, which is the sum of $100,000 (the owner's initial investment) and $45,000 (net income earned during the accounting period).

After All Appropriate Closing Entries to the Following Accounts Have