Hal Smith opened Smith's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: 1. Smith invested $25,000 cash in the business.
2) Smith contributed $100,000 of equipment to the business.
3) The company paid $2,000 cash to rent office space for the month.
4) The company received $16,000 cash for repair services provided during March.
5) The company paid $6,200 for salaries for the month.
6) The company provided $3,000 of services to customers on account.
7) The company paid cash of $500 for monthly utilities.
8) The company received $3,100 cash in advance of providing repair services to a customer.
9) Smith withdrew $5,000 for his personal use from the company.
Based on this information, the balance in Hal Smith, Capital reported on the Statement of Owner's Equity at the end of March would be:
A) $133,400.
B) $130,300.
C) $125,300.
D) $8,400.
E) $13,500.

Question

Quizplus · Accepted Answer

To find the balance in Hal Smith, Capital at the end of March, we need to calculate the beginning balance, add the net income or subtract the net loss, and then subtract any owner withdrawals.

Beginning balance:
Hal Smith invested $25,000 cash + $100,000 equipment = $125,000

Net income:
Revenue = $16,000
Expenses = $2,000 (rent) + $6,200 (salaries) + $500 (utilities) = $8,700
Net income = $16,000 - $8,700 = $7,300

Total:
Beginning balance + Net income = $125,000 + $7,300 = $132,300

Owner withdrawals: 
Hal Smith withdrew $5,000 for personal use, so we subtract this from the total:
$132,300 - $5,000 = $127,300

Therefore, the balance in Hal Smith, Capital reported on the Statement of Owner's Equity at the end of March would be $130,300 (B).

Hal Smith Opened Smith's Repairs on March 1 of the Current