Final answer:
The statement of owner’s equity for Betsy Ray's accounting service for June starts with an initial investment of $20,000, adds the net income of $10,000, and subtracts withdrawals of $8,000, resulting in an ending owner’s equity of $22,000.
Step-by-step explanation:
To prepare a statement of owner’s equity for Betsy Ray's accounting service for the month of June, we'll begin with her initial investment and adjust for her net income and withdrawals. The initial equity, or owner's capital, is the amount invested by Betsy, which is $20,000. Over the month, Betsy earned a net income of $10,000 which increases the owner’s equity. However, she also made withdrawals totaling $8,000, which decreases the owner’s equity. The statement would look like this:
Statement of Owner’s Equity for June
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- Beginning Owner's Capital, June 1: $20,000
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- Add: Net Income: $10,000
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- Less: Withdrawals: $8,000
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- Ending Owner's Capital, June 30: $22,000
Explanation: Betsy Ray’s owner equity at the start of June was $20,000. Her business operations throughout the month generated $10,000 in net income, pushing the equity up to $30,000. After subtracting her withdrawals of $8,000, we arrive at an ending owner’s equity of $22,000 as of June 30.