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    bluebayou's Avatar
    bluebayou Posts: 1, Reputation: 1
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    #1

    Oct 17, 2014, 12:31 PM
    What is the Owner's Capital?
    If I am given the amounts of the following: assets, liabilities, owner's withdrawal, revenues and expenses, how do I determine the owner's capital? Any help given would really be appreciated.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Oct 17, 2014, 01:07 PM
    You need to know the basic accounting equation, which is: Assets = Liabilities + Owners Equity

    Which can be rearranged to: Owners Equity = Assets - Liabilities

    First solve for Owners Equity. This will be ending owners equity.

    Now you can solve for owners capital, which is beginning owners equity. You need to know the changes in owners equity formula, which is: Ending Owners Equity = Beginning Owners Equity + Revenues - Expenses - Owners Withdrawals

    This can be rearranged to: Beginning Owners Equity(owners capital) = Ending Owners Equity - Revenues + Expenses + Owners Withdrawals.

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