Question

Betsy Ray started an accounting service on June 1, 20--, by investing $20,000. Her net income for the month was $10,000, and she withdrew $8,000. Prepare a statement of owner's equity for the month of June. If an amount is zero, enter 0.

Betsy Ray's Accounting Service Statement of Owner's Equity For Month Ended June 30, 20--
a. Owner's Equity, June 1: $20,000; Net Income: $10,000; Withdrawals: $8,000; Owner's Equity, June 30: $22,000
b. Owner's Equity, June 1: $20,000; Net Income: $10,000; Withdrawals: $8,000; Owner's Equity, June 30: $22,000
c. Owner's Equity, June 1: $20,000; Net Income: $10,000; Withdrawals: $8,000; Owner's Equity, June 30: $22,000
d. Owner's Equity, June 1: $20,000; Net Income: $10,000; Withdrawals: $8,000; Owner's Equity, June 30: $22,000

Answer 1

The statement of owner's equity for Betsy Ray's accounting service for the month of June can be prepared using the provided formula: Owner's Equity, June 1 + Net Income - Withdrawals = Owner's Equity, June 30. Using the given information, the correct statement of owner's equity is option b.

Step-by-step explanation:

The statement of owner's equity for Betsy Ray's accounting service for the month of June can be prepared using the formula:

Owner's Equity, June 1 + Net Income - Withdrawals = Owner's Equity, June 30.

Using the given information, we can calculate:

Owner's Equity, June 1: $20,000 + Net Income: $10,000 - Withdrawals: $8,000 = Owner's Equity, June 30: $22,000.

Therefore, the correct statement of owner's equity for the month of June is option b: Owner's Equity, June 1: $20,000; Net Income: $10,000; Withdrawals: $8,000; Owner's Equity, June 30: $22,000.