{"id":3091,"date":"2020-10-08T22:13:38","date_gmt":"2020-10-08T22:13:38","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=3091"},"modified":"2020-11-30T20:57:36","modified_gmt":"2020-11-30T20:57:36","slug":"statement-of-owners-equity","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/statement-of-owners-equity\/","title":{"raw":"Statement of Owner's Equity","rendered":"Statement of Owner&#8217;s Equity"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Prepare a statement of owner\u2019s equity<\/li>\r\n<\/ul>\r\n<\/div>\r\nThere is something you may notice about creating financial statements: at this point, all the brain work is done. Now you just take numbers off the adjusted trial balance and fill them into a form.\r\n\r\nThe statement of owner\u2019s equity builds off the income statement, starting with revenues and expenses combined ($1,350 net income), adding capital, and subtracting any withdrawals.\r\n<table class=\"fin-table gridded\"><caption>NeatNiks\r\nAdjusted Trial Balance\r\nFor the month ended October 31, 20XX<\/caption>\r\n<thead>\r\n<tr>\r\n<th rowspan=\"2\" scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\r\n<th rowspan=\"2\" scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\r\n<th colspan=\"2\" scope=\"col\">Adjusted trial balance<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\"><\/th>\r\n<th scope=\"col\"><\/th>\r\n<th scope=\"col\">Debits<\/th>\r\n<th scope=\"col\">Credits<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>110<\/td>\r\n<td>Checking<\/td>\r\n<td class=\"r\">3,500.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>120<\/td>\r\n<td>Accounts Receivable<\/td>\r\n<td class=\"r\">5,650.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>125<\/td>\r\n<td>Supplies<\/td>\r\n<td class=\"r\">1,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>130<\/td>\r\n<td>Prepaid Rent<\/td>\r\n<td class=\"r\">10,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>210<\/td>\r\n<td>Account Payable<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,600.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>220<\/td>\r\n<td>Contractor Payable<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,200.00<\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>310<\/td>\r\n<td class=\"r\">Nick Frank, Capital Contributions<\/td>\r\n<td class=\"r\"><\/td>\r\n<td>20,000.00<\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>330<\/td>\r\n<td>Nick Frank, Withdrawals<\/td>\r\n<td class=\"r\">4,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>410<\/td>\r\n<td>Service Revenue<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">8,750.00<\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>510<\/td>\r\n<td>Insurance Revenue<\/td>\r\n<td class=\"r\">1,500.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>520<\/td>\r\n<td>Rent Expense<\/td>\r\n<td class=\"r\">2,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>530<\/td>\r\n<td>Supplies Expense<\/td>\r\n<td class=\"r\">1,600.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr class=\"highlight\">\r\n<td>540<\/td>\r\n<td>Contractor Expense<\/td>\r\n<td class=\"r\">2,300.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<tfoot>\r\n<tr>\r\n<td><\/td>\r\n<td>Totals<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00\r\n<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00\r\n<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tfoot>\r\n<\/table>\r\n&nbsp;\r\n<table class=\"fin-table acctstatement fw\"><caption>NeatNiks\r\nStatement of Owner's Equity\r\nFor the month ended October 31, 20XX<\/caption>\r\n<tbody>\r\n<tr>\r\n<th scope=\"row\">Nick Frank, Capital, October 1, 20XX<\/th>\r\n<td class=\"r\">$0<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Owner contributions<\/th>\r\n<td class=\"r\">20,000<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Net income\/(loss) for the month<\/th>\r\n<td class=\"r\">1,350<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>21,350<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Owner withdrawals<\/th>\r\n<td class=\"r\">(4,000)<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Nick Frank, Capital, October 31, 20XX<\/th>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$17,350<span class=\"u-sr-only\">Double Line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nIf there had been a loss instead of net income (if expenses had exceeded revenues), that loss would have been subtracted from the capital and would be noted with parentheses. Also, the ending balance on October 31 will be the beginning balance on November 1.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23391\r\n\r\n[ohm_question hide_question_numbers=1]203085[\/ohm_question]\r\n\r\n<\/div>\r\nNow we're ready to create the balance sheet.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Prepare a statement of owner\u2019s equity<\/li>\n<\/ul>\n<\/div>\n<p>There is something you may notice about creating financial statements: at this point, all the brain work is done. Now you just take numbers off the adjusted trial balance and fill them into a form.<\/p>\n<p>The statement of owner\u2019s equity builds off the income statement, starting with revenues and expenses combined ($1,350 net income), adding capital, and subtracting any withdrawals.<\/p>\n<table class=\"fin-table gridded\">\n<caption>NeatNiks<br \/>\nAdjusted Trial Balance<br \/>\nFor the month ended October 31, 20XX<\/caption>\n<thead>\n<tr>\n<th rowspan=\"2\" scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\n<th rowspan=\"2\" scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\n<th colspan=\"2\" scope=\"col\">Adjusted trial balance<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<th scope=\"col\"><\/th>\n<th scope=\"col\"><\/th>\n<th scope=\"col\">Debits<\/th>\n<th scope=\"col\">Credits<\/th>\n<\/tr>\n<tr>\n<td>110<\/td>\n<td>Checking<\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>120<\/td>\n<td>Accounts Receivable<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>125<\/td>\n<td>Supplies<\/td>\n<td class=\"r\">1,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>130<\/td>\n<td>Prepaid Rent<\/td>\n<td class=\"r\">10,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>210<\/td>\n<td>Account Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Contractor Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,200.00<\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>310<\/td>\n<td class=\"r\">Nick Frank, Capital Contributions<\/td>\n<td class=\"r\"><\/td>\n<td>20,000.00<\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>330<\/td>\n<td>Nick Frank, Withdrawals<\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>410<\/td>\n<td>Service Revenue<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>510<\/td>\n<td>Insurance Revenue<\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>520<\/td>\n<td>Rent Expense<\/td>\n<td class=\"r\">2,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>530<\/td>\n<td>Supplies Expense<\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr class=\"highlight\">\n<td>540<\/td>\n<td>Contractor Expense<\/td>\n<td class=\"r\">2,300.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<\/tbody>\n<tfoot>\n<tr>\n<td><\/td>\n<td>Totals<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00<br \/>\n<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00<br \/>\n<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<p>&nbsp;<\/p>\n<table class=\"fin-table acctstatement fw\">\n<caption>NeatNiks<br \/>\nStatement of Owner&#8217;s Equity<br \/>\nFor the month ended October 31, 20XX<\/caption>\n<tbody>\n<tr>\n<th scope=\"row\">Nick Frank, Capital, October 1, 20XX<\/th>\n<td class=\"r\">$0<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Owner contributions<\/th>\n<td class=\"r\">20,000<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Net income\/(loss) for the month<\/th>\n<td class=\"r\">1,350<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td class=\"r line-single\"><span class=\"u-sr-only\">Single Line<\/span>21,350<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Owner withdrawals<\/th>\n<td class=\"r\">(4,000)<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Nick Frank, Capital, October 31, 20XX<\/th>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single Line<\/span>$17,350<span class=\"u-sr-only\">Double Line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>If there had been a loss instead of net income (if expenses had exceeded revenues), that loss would have been subtracted from the capital and would be noted with parentheses. Also, the ending balance on October 31 will be the beginning balance on November 1.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23391\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23391&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23391\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<p><iframe loading=\"lazy\" id=\"ohm203085\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=203085&theme=oea&iframe_resize_id=ohm203085\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n<p>Now we&#8217;re ready to create the balance sheet.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3091\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Statement of Owner&#039;s Equity. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":17,"menu_order":14,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Statement of Owner\\'s Equity\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-3091","chapter","type-chapter","status-publish","hentry"],"part":67,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/users\/17"}],"version-history":[{"count":14,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3091\/revisions"}],"predecessor-version":[{"id":6623,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3091\/revisions\/6623"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/parts\/67"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/3091\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/media?parent=3091"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=3091"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/contributor?post=3091"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/wp-json\/wp\/v2\/license?post=3091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}