The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Sue Harris, Capital account?

$\begin{array} { l r }
\text { Total revenues } & \$ 125,000 \
\text { Total expenses } & 60,000 \
\text { Sue Harris, Capital } & 80,000 \
\text { Sue Harris, Withdrawals } &15,000
\end{array}$

A) $130,000.
B) $65,000.
C) $80,000.
D) $280,000.
E) $145,000.

Question

The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Sue Harris, Capital account?

$\begin{array} { l r } 
\text { Total revenues } & \$ 125,000 \
\text { Total expenses } & 60,000 \
\text { Sue Harris, Capital } & 80,000 \
\text { Sue Harris, Withdrawals } &15,000
\end{array}$

A) $130,000.
B) $65,000.
C) $80,000.
D) $280,000.
E) $145,000.

Quizplus · Accepted Answer

The closing entry for net income will increase Sue Harris, Capital by $65,000 ($125,000 - $60,000). The closing entry for withdrawals will decrease Sue Harris, Capital by $15,000. Therefore, the balance in the Sue Harris, Capital account after closing entries are posted will be $80,000 + $65,000 - $15,000 = $130,000.

The Following Information Is Available from the Adjusted Trial Balance