Statement of Owner's Equity Financial information related to Lost Trail Company, a proprietorship, for the month...

Statement of Owner's Equity

Financial information related to Lost Trail Company, a proprietorship, for the month ended November 30, 2019, is as follows:

Net income for November	$95,100
Penny Beall's withdrawals during November	10,460
Penny Beall, capital, November 1, 2019	725,600

a. Prepare a statement of owner's equity for the month ended November 30, 2019.

Lost Trail Company
Statement of Owner's Equity
For the Month Ended November 30, 2019
		$
	$


		$

b. Why is the statement of owner’s equity prepared before the November 30, 2019, balance sheet?

The statement of owner’s equity is prepared before the November 30, 2019, balance sheet because the account balance is needed for the balance sheet.

Expert Solution

Statement of owner's Equity:
Beginning Balanc eof Equity				725600
Add: Net income				95100
				820700
Less: Withdrawals during the year				10460
Ending Penny Beall capital				810240

Yes, the Statement of Owner's equity is prepared before making the Balance Sheet.
This is due to fact that balance of Ending capital need to be shown in the Balance Sheet after making all the adjustment related to capital.

ekkarill92 answered 2 years ago

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