Use this information to answer the following question. Here is the balance sheet for Costello Container Company:

-If the equipment were sold for $13,000,then the Jose Costello,Capital account would
A)increase by $37,000.
B)increase by $13,000.
C)decrease by $13,000.
D)stay the same.

Question

Use this information to answer the following question. Here is the balance sheet for Costello Container Company:

-If the equipment were sold for $13,000,then the Jose Costello,Capital account would
A)increase by $37,000. 
B)increase by $13,000. 
C)decrease by $13,000. 
D)stay the same.

Quizplus · Accepted Answer

Selling equipment for cash affects asset accounts (equipment and cash) but does not directly affect the owner's capital account. The capital account would only change due to profits or losses from operations or owner transactions like withdrawals or additional investments, not from the sale of equipment at its book value.

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