The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the C. Higgins, Capital account?
$\begin{array}{llr}
\text {Net Income } &\$42,500\
\text { C. Higgins, Capital } &130,000\
\text { C. Higgins, Withdrawals } &12,000
\end{array}$

A) $99,500.
B) $130,000.
C) $75,500.
D) $184,500.
E) $160,500.

Question

The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the C. Higgins, Capital account? 
$\begin{array}{llr}
  \text {Net Income  } &\$42,500\
 \text { C. Higgins, Capital } &130,000\
 \text { C. Higgins, Withdrawals } &12,000
\end{array}$

A) $99,500.
B) $130,000.
C) $75,500.
D) $184,500.
E) $160,500.

Quizplus · Accepted Answer

The balance in the C. Higgins, Capital account after closing entries is calculated by adding the net income to the initial capital and then subtracting the withdrawals: $130,000 + $42,500 - $12,000 = $160,500.

The Following Information Is Available for the Higgins Travel Agency