Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B

Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the current year ended August 31, 2014. Barb Schroeder, the owner, invested an additional $36,000 in the business during the year and withdrew cash of $18,000 for personal use. Barb Schroeder, capital as of September 1, 2013, was $380,000.


Answer:

SENTINEL TRAVEL SERVICE
Statement of Owner’s Equity
For the Year Ended August 31, 2014
Barb Schroeder, capital, September 1, 2013 $380,000
Additional investment by owner during year $36,000
Net loss for the year (7,000)
$29,000
Less withdrawals 18,000
Increase in owner’s equity 11,000
Barb Schroeder, capital, August 31, 2014 $391,000