The owner contributed R150 000 additional capital during the year and withdrew R50 000.If opening equity was…

Question

The owner contributed R150 000 additional capital during the year and withdrew R50 000.If opening equity was R200 000 and profit is R80 000, closing equity is:

ScanSolve AI Tutor · Accepted Answer

To calculate the closing equity, we use the accounting equation for equity:

\text{Closing Equity} = \text{Opening Equity} + \text{Additional Capital} + \text{Profit} - \text{Withdrawals}

Identify the given values.
- Opening Equity = R200 000
- Additional Capital = R150 000
- Profit = R80 000
- Withdrawals = R50 000
Substitute the values into the formula.
$\text{Closing Equity} = \text{R200 000} + \text{R150 000} + \text{R80 000} - \text{R50 000}$
Perform the calculation.
$\text{Closing Equity} = \text{R350 000} + \text{R80 000} - \text{R50 000}$ $\text{Closing Equity} = \text{R430 000} - \text{R50 000}$ $\text{Closing Equity} = \text{R380 000}$
Compare the result with the given options.
The calculated closing equity is R380 000, which matches option A.

The final answer is $\text{A. R380 000}$ .

The owner contributed R150 000 additional capital during the year and withdrew R50 000.If opening equity was R200 000 and profit is R80 000, closing equity is:

Answer

Step-by-step solution

Identify the given values.

Substitute the values into the formula.

Perform the calculation.

Compare the result with the given options.

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