Concept explainers
Concept Introduction:
Owner's Equity - Owner's equity is an important component of the balance sheet. Owner's equity or capital represents the amount invested in the business minus the withdrawals made from the business plus the net income (or minus the net loss) since the business began.
The owner's equity for Ernest Consulting
Explanation of Solution
The owner's equity can be determined using the two methods as explained below:
Alternative 1:
Given in question:
Alternative 2:
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