Question

A resort spa services fund required 324,284 USD. These costs will be funded through a variety of sources, including long-term loan, and personal investment from the owner.

Start-up
Requirements
Startup Expenses
Legal & Registration	$        11,000
Stationaries Etc	$          2,000
Broucher	$          5,000
Insurance	$          7,000
Website & Online Access	$          3,000
Expensed Equipment (sound system,hardware,software)	$      180,000
Others	$          5,000
Total Expenses	$      213,000
Startup Assets
Cash Required	$        50,254
Startup Inventory	$        40,000
Other Current Assets	$        21,000
Long Term Assets	$                -
Total Assets	$      111,254
Total Requirements	$      324,284

How to Show up the investment from the Owner 200,000$ ?

Answer 1

Owner investment, also called owner’s investment or contributed capital, is the amount of assets that the owner puts into the company. In other words, this is the amount of money or other assets that the owner contributes to the business either to start it or to keep it running.

The owner’s investment account is a temporary equity account with a credit balance. This means that the investment account is closed out at the end of each year increasing the balance in the owner’s capital account. You can think of an investment like the owner giving money to the company. Each time the owner gives money to the company; the owner’s capital account (his stake in the business) grows.

Withdrawal or distributions work the opposite way. Each withdrawal decreases the capital account balance and reduces the owner’s stake in the company assets.

Owners typically make investments or contributions to their companies in two different ways: cash or other assets. The first and most common form of investment is straight cash. Most owners contribute cash to their business when it needs extra financing for capital projects or expansions. Contributions aren’t limited to cash though. Any contribution from an owner counts. If an owner gives other assets like vehicles or equipment to the company, the owner’s investment account with also increase.

So similarly the investment could be shown in two ways either in cash or in other current assets

Cash/other current assets    $200,000

To Capital Account             $200,000