The ending owner’s capital balance after closing is $382,300.
The company had a net profit for the year of $91,300. This is calculated by subtracting expenses from net income. $205,000-$113,700 = $91,300.
In order to calculate the the ending owner’s capital for the year the accountant will add the net income to the starting owner’s equity, and then subtract the amount that the owner withdrew from the business.
Starting owner’s equity ($317,000 ) + net income ($91,300) = $408,300 and then subtract the amount withdrawn ($26,000) = $382,300, which is the ending owner’s equity balance.
Answer:
Equipment 255,667 debit
Lease Liability 255,667 credit
Explanation:
The company will post the equiptment int accounting as the same value of the discounted lease payment.
C 20,000
time 25
rate 0.06
PV $255,667.1232
On each year-end the company will recognize the interest expense and the payment of 20,000 dollars
By the end of the lease, there will be no lease liability as all payment were made
<span>Inflation is a general increase in prices and fall in the purchasing value of money. If money becomes too common, the price of goods will increase, but the worth of the money will drastically decrease. This causes large conflict in communities.
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