5 3 Expanded Owners Equity Section of the

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5. 3 Expanded Owner’s Equity Section of the Balance Sheet

5. 3 Expanded Owner’s Equity Section of the Balance Sheet

Expanding the Owner’s Equity (OE) section of the balance sheet: 1. NET INCOME >

Expanding the Owner’s Equity (OE) section of the balance sheet: 1. NET INCOME > DRAWINGS = INCREASE IN CAPITAL Income Stateme nt E. Boa, Capital, June + 1 Net Income Trial Drawings Balance Increase in Capital E. Boa, Capital, June 30 485. 60 12 276. 53 1 709. 07 1 500. 00 209. 07 12

2. NET INCOME < DRAWINGS = DECREASE IN CAPITAL E. Boa, Capital, January 1

2. NET INCOME < DRAWINGS = DECREASE IN CAPITAL E. Boa, Capital, January 1 2 0376. 64 + Net Income 10 594. 03 Drawings 15 376. 70 Decrease in Capital 4 782. 67 E. Boa, Capital, December 31 15 593. 97

3. NET LOSS + DRAWINGS = DECREASE IN CAPITAL E. Boa, Capital, January 1

3. NET LOSS + DRAWINGS = DECREASE IN CAPITAL E. Boa, Capital, January 1 31 216. 40 ADD - 5 147. 62 Net Loss Drawings 19 400. 00 Decrease in Capital 24 547. 62 E. Boa, Capital, June 30 6 668. 78

Account Form Balance Sheet – Horizontal

Account Form Balance Sheet – Horizontal

Report Form Balance Sheet - Vertical Liabilities + Owner’s Equity

Report Form Balance Sheet - Vertical Liabilities + Owner’s Equity

1) Despite drawings of $2 000 in the first 6 months of 2012, and

1) Despite drawings of $2 000 in the first 6 months of 2012, and a net income of $3 200, “Bright Stop Ltd. ” was still in good shape at the end of June. The year had opened boasting a capital account of $39 000 Beginnin g Capital Bright Stop Ltd. , Capital, Jan. 1 39 000 Net Income 3 200 Drawings 2 000 Increase in Capital 1 200 Bright Stop Ltd. , Capital, June 30 40 200 Ending Capital

2) Ms. S Henessey invested $13 000 in her new business of “Wicher Imports”

2) Ms. S Henessey invested $13 000 in her new business of “Wicher Imports” September 1, 2012. After 3 months of operation her accountant advised her that she had withdrawn $4 800 and earned a net income of $2 400. S. Henessey, Capital, Sept. 1 Net Income Drawings Decrease in Capital S. Henessey, Capital, Dec. 1 10 600 13 000 2 400 4 800 2 400

3) The experimental self service drycleaning operation run by one of the Markus Brothers

3) The experimental self service drycleaning operation run by one of the Markus Brothers proved unsuccessful in the trial year. “Markus Cleaners” showed a net loss of $3 300 despite the enthusiastic initial capital investment of $20 000. A mere $1 300 in drawings had been made during the year. Markus Bros. , Capital, Jan. 1 20 000 Net Loss 3 300 Drawings 1 300 Decrease in Capital 4 600 Markus Bros. , Capital, Dec 31. 15 400

Complete the following exercises: Do you have the following done? Section 5. 2 Ex.

Complete the following exercises: Do you have the following done? Section 5. 2 Ex. 1, 2, 4, 5 p. 150 -152 (t), p. 86 -90 (w) Today: Section 5. 3 Ex. 1, 2, 3 p. 157 (t), p. 91 -92(w)