John Smith is the owner of Alpha Technologies Ltd.The beginning balance in Smith,capital was $90 000.The revenues and expenses were $70 000 and $50 000,respectively.If no drawings were made by Smith during the year,the ending balance in Smith,Capital must be $100 000.

Question

Quizplus · Accepted Answer

The formula for calculating ending balance in owner's equity is:
Beginning balance + Revenues - Expenses - Drawings = Ending balance
Substituting the values given:
$90,000 + $70,000 - $50,000 - 0 = $110,000
Therefore, the correct answer is B as the ending balance would be $110,000 and not $100,000.

John Smith Is the Owner of Alpha Technologies Ltd