Question

The owner of a firm had capital of $78,000 on January 1, 2019, and made withdrawals...

The owner of a firm had capital of $78,000 on January 1, 2019, and made withdrawals of $29,000 during 2019. The business earned a net income of $42,000 for the year.

What amount of capital was shown as of December 31, 2019, on the statement of owner’s equity?

How much was the increase or decrease in capital for the year?

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Answer #1

Statement of Owner's Equity

For the Year ended December 31, 2019

Owner's Capital, jan 1st 2019

$        78,000.00

Net Income for the Year

$        42,000.00

Less: Lloyd Hampton Drawings

$      (29,000.00)

Increase in Owner's Equity during year

$        13,000.00

Owner's Capital, December 31st 2019

$        91,000.00

Answer for requirement 1= $91000

Answer for requirement 2= $13000

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