The Following Information Is Available for Zephyr Company Before Closing

question 99

Multiple Choice

The following information is available for Zephyr Company before closing the accounts. After all of the closing entries are made, what will be the balance in the Zephyr, Capital account? $$\begin{array} { | l | r | } \hline \text { Net income } & \$ 115,000 \\\hline \text { Zephyr, Capital } & 110,000 \\\hline \text { Zephyr, Withdrawals } & 39,000 \\\hline\end{array}$$

• A)$225,000.
• B)$264,000.
• C)$956,000.
• D)$115,000.
• E)$186,000.

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Definitions:

Market Value

The estimated amount for which an asset or company could be sold on the open market.

Retention Ratio

The portion of a company's earnings that is not distributed as dividends but is retained by the business for reinvestment.

Retained Earnings

The portion of a company’s net profits that are kept within the company instead of being paid out to shareholders as dividends.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, often referred to as the bottom line.