Question

Hannah Roberts owns and operates Hannah's Pool Service Company. On January 1, Hannah Roberts, Capital had a balance of $309,170. During the year, Hannah invested an additional $22,040 and withdrew $39,010. For the year ended December 31, Hannah's Pool Service Company reported a net income of $55,080.

Prepare a statement of owner's equity for the year ended December 31. Hannah's Pool Service Company Statement of Owner's Equity For the Year Ended December 31.

Answer 1

Hannah's Pool Service Company

Statement of owner equity for the year ended December 31

Particulars Amount

Capital (January 1) $309,170

Investment during the year $22,040

Net Income $55,080

Withdrawals during the year (-$39,010)

Increase in the owner equity $38,110

Capital (December 31) $347.280

Workings

a. Increase in the owner equity = Investment during the year + Net income - withdrawal during the year

=$22040+$55080 -$39010

=$38110

b. Capital (December 31) = Capital on January 1 + Increase in owner equity

=$309170 +$38110

=$347280