Concept explainers
Introduction:
Income Statement: The income statement is also called a
Statement of Owner’s Equity: The statement of owner’s equity is the statement which shows the increase or decrease in equity shareholders fund within an accounting period. This is increased by profits/ gains to shareholders during the year while the amount distributed to shareholders are shown as deductions.
Balance Sheet: The balance sheet is the position of Assets and Liabilities of the company at the end of the financial year. It includes all the assets, owner’s share named as equity shareholder and all debts named as liabilities of the company. Its equation is “Assets = Liabilities + Equity Shareholders”.
To calculate: To prepare income statement and statement of owner’s equity for the month ended January 31, 2017 and then prepare balance sheet as on January 31, 2017.
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