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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Your friend Chris Stevick started a part-time business in June and has been keeping her own accounting records. She has been preparing monthly financial statements. At the end of August, she stopped by to show you her performance for the most recent month. She prepared the following income statement and balance sheet:

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Chris has also heard that there is a statement of owner’s equity, but she is not familiar with that statement. She asks if you can help her prepare one. After confirming that she has no assets other than cash, no liabilities, and made no additional investments in the business in August, you agree.

REQUIRED

  1. 1. Prepare the statement of owner’s equity for your friend’s most recent month.
  2. 2. What suggestions might you give to Chris that would make her income statement more useful?

1.

To determine

Prepare a statement of owner’s equity for the month ended June 30, 20--.

Explanation

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 a drawing is deducted from beginning owner’s equity to arrive at the result, ending owner’s equity.

Prepare a statement of owner’s equity for the month ended June 30, 20--:

C Quick Service
Statement of Owner’s Equity
For Month Ended June 30, 20-...

2.

To determine

Write a suggestion to C that will make her income statement more useful.

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