Alexis Wesson, the bookkeeper for Home Interiors, has just finished posting the closing entries for the year to the ledger. She is concerned about the following balances:

Table Summary: Capital account balance and ending capital balance amounts are shown.

Alexis knows that these amounts should agree and asks for your assistance in reviewing her work. Your review of the general ledger of Home Interiors reveals a beginning capital balance of $50,000. You also review the general journal for the accounting period and find the closing entries shown below.

1. What errors did Alexis Wesson make in preparing the closing entries for the period?

2. Prepare a general journal entry to correct the errors made.

3. Explain why the balance of the capital account in the ledger after closing entries have been posted will be the same as the ending capital balance on the statement of owner’s equity.

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$97,100 Capital account balance in the general ledger: Ending capital balance on the statement of owner's equity: 55,600