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A Sole Proprietorships (Appendix)
On May 1, Chen Chien Lao deposited $150,000 of her own savings in a separate bank account to start a printing business. She purchased copy machines for $52,500. Expenses for the year, including depreciation on the copy machines, were $105,000. Sales for the year, all in cash, were
$135,000. Chen withdrew $15,000 during the year.
Required
1. What is the balance in Chen's capital account at the end of the year?
2. Explain why the balance in Chen's capital account is different from the amount of cash on hand.
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