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On December 31, the Income Summary account of Madison Company has a debit balance of $18,000 after revenue of $20,000 and expenses of $38,000 were closed to the account. Madison Wells, Drawing has a debit balance of $2,100 and Madison Wells, Capital has a credit balance of $39,000. Required: Record the journal entries necessary to complete closing the accounts. What is the new balance of Madison Wells, Capital

Respuesta :

New Balance is $18,900.

What is a Balance Sheet?

  • A financial statement that lists a company's assets, liabilities, and shareholder equity at a certain point in time is referred to as a balance sheet.
  • The foundation for calculating investor return rates and assessing the  capital structure of a company is provided by balance sheets.
  • The balance sheet is a financial statement that gives a quick overview of the assets and liabilities of a firm as well as the amount of shareholder investment.
  • When doing basic analysis or calculating financial ratios, balance sheets can be utilized in conjunction with other crucial financial data.
  • A company's balance sheet gives a quick snapshot of its financial situation at any one time.
  • On its alone, it cannot provide an understanding of the tendencies manifesting over a longer time frame.

New Balance = ($39,000-$18,000-$2,100) = $18,900

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