Question

--/10 Question 2 View Policies Current Attempt in Progress Presented below is information from the statements of owner's equity for Crane Consulting for the first three years of operation. Determine the missing amounts: 2019 2020 2021 J. Crane, capital, January 1 $0 $56,000 (c) $ Investment in the year 36,500 21,000 Profit (loss) for the year 30,000 (b) 28,000 Drawings in the year (a) 19,000 14,300 J. Crane, capital, December 31 56,000 67,400 (d) Save for Later

Answer 1

a) Drawings of the year 2019 = $10500.

Solution :

Closing balance of capital = opening balance of capital + investments in the year ± profit/(loss) - drawings.

$56000 = $0 + $36500 + $30000 - drawings.

$56000 = $66500 - drawings.

Drawings = $66500 - $56000

Drawings = $10500.

b) profit for the year 2020= $30400.

Solution :

Closing balance of capital = opening balance of capital + investments in the year ± profit/(loss) - drawings.

$67400 = $56000 +$0 ± profit /(loss) - $19000.

$67400 = $37000 ± profit /(loss).

Profit /(loss) = $67400 - $37000.

Profit /(loss) = $30400.

That means this is profit as it is positive figure.

c) opening balance of capital of the year 2021 = $67400.

Solution :

The closing balance of capital of the previous year becomes the opening balance of capital of the next year. As a result, the closing balance of capital of 2020 becomes the opening balance of capital of 2021.

d) Closing balance of capital of 2021= $102100.

Solution :

Closing balance of capital = opening balance of capital + investments in the year ± profit/(loss) - drawings.

Closing balance of capital = $67400 + $21000 +$28000 -$14300.

Closing balance of capital = $102100.