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Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the year ended August 31, 2016. Barb Schroeder, the owner, invested an additional $36,000 in the business during the year and withdrew cash of $18,000 for personal use. Barb Schroeder, capital as of September 1, 2015, was $380,000.
Financial Accounting
Solutions
Financial Accounting
Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the year ended August 31, 2016. Barb Schroeder, the owner, invested an additional $36,000 in the business during the year and withdrew cash of $18,000 for personal use. Barb Schroeder, capital as of September 1, 2015, was $380,000.
Prepare statement of Owners’ Equity of ST Service for the year ended August 31, 2016
Explanation of Solution
Statement of owners’ equity: This statement reports the beginning owner’s equity and all the changes which led to ending owners’ equity. Additional capital, net income from income statement is added to and drawings are deducted from beginning owner’s equity to arrive at the end result, ending owner’s equity.
Prepare statement of owners’ equity of ST Service for the year ended August 31, 2016.
| ST Service | ||
| Statement of Owners’ Equity | ||
| For the Year Ended August 31, 2016 | ||
| BS capital, September 1, 2015 | $380,000 | |
| Additional investment by owner | $36,000 | |
| Net loss for the year | (7,000) | |
| Withdrawals | (18,000) | |
| Increase in owners’ equity | 11,000 | |
| BS capital, August 31, 2016 | $391,000 | |
Table (1)
Working Notes: Prepare income statement for ST Service for the year ended August 31, 2016...
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