Question

Statement of Owner's Equity

Yolanda Weaver owns and operates Weaver Advertising Services. On January 1, 2018, Yolanda Weaver, Capital had a balance of $274,300. During the year, Yolanda invested an additional $13,700 and withdrew $96,000. For the year ended December 31, 2018, Weaver Advertising Services reported a net income of $131,500.

Prepare a statement of owner's equity for the year ended December 31, 2018. Use the minus sign to indicate negative values.

Weaver Advertising Services
Statement of Owner's Equity
For the Year Ended December 31, 2018
1		$
2	$
3
4
5
6		$

1. Options are

• Additional investment during 2018
• Yolanda Weaver, capital, December 31, 2018
• Yolanda Weaver, capital, January 1, 2018
• Withdrawals
• Net income

2.

• Additional investment during 2018
• Yolanda Weaver, capital, December 31, 2018
• Yolanda Weaver, capital, January 1, 2018
• Cash

3.

• Yolanda Weaver, capital, December 31, 2018
• Yolanda Weaver, capital, January 1, 2018
• Net loss
• Net income

4.

• Yolanda Weaver, capital, December 31, 2018
• Yolanda Weaver, capital, January 1, 2018
• Withdrawals

5.

• Additional investment during 2018
• Yolanda Weaver, capital, December 31, 2018
• Decrease in owner's equity
• Increase in owner's equity

6.

• Additional investment during 2018
• Yolanda Weaver, capital, December 31, 2018
• Yolanda Weaver, capital, January 1, 2018
• Withdrawals
• Net income

Answer 1

$274,300 FañFño Weaver Advertising Services Statement of Owner's Equity For the Year Ended December 31, 2018 Yolanda Weaver, capital, January 1, 2018 Add: Additional investment during 2018 $13,700 Add: Net income $131,500 Less: Withdrawals $96,000 Increase in owner's equity Yolanda Weaver, capital, December 31, 2018 $49,200 $323,500 Explanation: Statement of Owner's Equity is prepared by the firm for reporting period as at last day of respective reporting period to analyze and report reason for change in owner's equity during the said period. As for as the firm is concerned, when cash comes into the business from the owner, it increases owner's equity in the firm; When firm earns profit, it increases owner's equity in the firm; When firm suffers loss, it decreases owner's equity in the firm; Also, when owner withdraws cash for his/her personal use from the firm, it decreases owner's equity in firm. Accordingly, statement of owner's equity for the year ended December 31, 2018 is prepared above.