Question

The following financial statement information is from five separate companies.

	Company A			Company B			Company C			Company D			Company E
December 31, 2018
Assets	$	40,000		$	31,200		$	25,600		$	71,200		$	109,200
Liabilities		32,800			21,840			13,824			49,127			?
December 31, 2019
Assets		45,000			32,400			?			81,900			124,200
Liabilities		?			22,032			14,773			39,312			98,118
During year 2019
Owner investments		6,000			1,400			9,750			?			6,500
Net income (loss)		10,550			?			7,400			13,515			8,742
Owner cash withdrawals		3,500			2,000			5,875			0			11,000

2a. What is the amount of equity on December 31, 2018 for Company B

2b. What is the amount of equity on December 31, 2019 for Company B

2c. What is net income for year 2019 for Company B.
2.d statement of owners equity

Answer 1

As we know that Assets = Liabilities + Equity

All calculation for company B

2a). So Equity = Assets - Liabilities

as of Dec 31, 2018

Equity = 31200-21840 = $9360

2b).

as of Dec 31, 2019

Equity = 32400-22032 = $10368

2c). As we know

& Equity at the end of 2019 = Equity at the end of 2018 + new owner investment in year 2019 + retained earning in 2019

Retained earning = NI - Dividend(Owner cash withdrawal)

So, $10368 = $9360 + $1400 + NI in 2019- $2000

=> NI in 2019 = $1608

2d).

Statement of owner equity

Owner's equity at December 31 2018 $9360

Add: Owner's investment $1400

Net Income in 2019 $1608

Subtotal $12368

Deduct: Owner's draws $2000

Owner's equity at December 31 2019 $10368