See below thanks. If Capital at year end is $90,000 and during the year revenues

Question

See below thanks.

If Capital at year end is $90,000 and during the year revenues were $160,000 with expenses of $140,000 and drawing of $10,000, what was beginning capital? 90,000 80,000 70,000 60,000 None of the above ABC pays a weekly payroll of $20,000 and pays wages on Friday of each week. If Dec 31 is on a Tues, what is the adjusting entry on Dec 31 ? (DR=debit, CR=credit) DR Wage Expense $20,000 CR Cash $20,000 DR Wage Expense $12,000 CR Cash $12,000 DR Wage Expense $8,000 CR Wages Payable $8,000 DR Wage Expense $20,000 CR Wages Payable $20,000 None of the above

Explanation / Answer

b $80,000 Statement showing computations Particulars Amount Revenues            160,000.00 Less Expenses          (140,000.00) Net Income               20,000.00 Ending Capital               90,000.00 Less Net Income            (20,000.00) Add Drawing               10,000.00 Beginning Capital               80,000.00 c Dr Wage Expense 8000, Cr Wage payable 8,000 Statement showing computations Particulars Amount Since there are 5 working days in a week and wages are paid on Friday therefore if Dec31 is on Tuesday then adjusting entry needs to be passed to record expense of Monday and Tuesday i.e. 2 Days So for 2 Days amount would be = 20,000*2/5                 8,000.00 Wage Expense Dr                 8,000.00 To Wages Payable              8,000.00

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