At the end of its first month of operations,Michael's Consulting Services reported net income of $25,000.They also had account balances of: Cash,$18,000;Office Supplies,$2,000 and Accounts Receivable $10,000.The owner's total investment for this first month was $5,000. Calculate the ending balance in the Owner's Capital account to be reported on the Statement of Owner's Equity.
A)$30,000
B)$25,000
C)$20,000
D)$5,000
E)$7,000

Question

Quizplus · Accepted Answer

The ending balance in the Owner's Capital account is calculated by adding the owner's initial investment to the net income. Therefore, $5,000 (initial investment) + $25,000 (net income) = $30,000.

At the End of Its First Month of Operations,Michael's Consulting