Final answer:
A statement of owner's equity summarizes the changes in the owner's capital of a business over a specific period. It includes information about capital contributions, withdrawals, and net income. To prepare the statement, gather details about these elements for the year.
Step-by-step explanation:
A statement of owner's equity is a financial statement that shows the changes in the owner's equity of a business over a specific period. It summarizes the changes in the owner's capital, including contributions, withdrawals, and net income. To prepare a statement of owner's equity for Star Express Cleaning Service, you will need to gather information about the owner's capital, net income, and any additional contributions or withdrawals made during the year.
To illustrate, let's assume that the owner's capital at the beginning of the year was $50,000. During the year, the owner made a capital contribution of $10,000, and the business generated a net income of $30,000. The owner also withdrew $5,000 for personal use. Based on this information, the statement of owner's equity for the year ended December 31, 's Star Express Cleaning Service would look as follows:
- Owner's Capital, January 1: $50,000
- Additional Capital Contribution: $10,000
- Net Income: $30,000
- Less: Owner's Withdrawals: $5,000
- Total Owner's Equity, December 31: $85,000