Following Is a List of Account Balances (Except for Owner's

question 24

Multiple Choice

Following is a list of account balances (except for owner's capital) of Wilson Mowing Service as of December 31 of the first year of operation: The proprietor, J.D. Wilson, contributed $3,000 at the beginning of the year: during the year, the proprietor took $12,000 in drawings.
At the end of the year, what is the amount of total liabilities?

• A)$11,900
• B)$24,100
• C)$21,200
• D)$12,200

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Definitions:

Interest Allowance

An amount allowed for interest, which can refer to the interest expense permitted on debt or the interest credited to an account; specifics can vary based on context.

Invested Capital

The total amount of money that shareholders and debt holders have invested in a company.

Capital Equity

The amount of money that would be returned to shareholders if all of the assets were liquidated and all of the company's debts were paid off.

Partnership Contract

A legal agreement between partners that outlines the terms and conditions of their business relationship.