Question

The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $180,000 at April 1, the beginning of the current year. Mr. Thompson invested an additional $25,000 in the business during the year. Accounts payable $ 2,000 Miscellaneous expense $ 1,030 Accounts receivable 10,340 Office expense 1,240 Cash 21,420 Supplies 1,670 Fees earned 73,450 Wages expense 23,550 Land 47,000 Drawing 16,570 Building 157,630 ​ ​ Prepare a statement of owner’s equity for the current year ended March 31.

Answer 1

Answer:

statement of owner’s equity = $236,060

Explanation:

                 Thompson Computer Services

                   Statement of owner’s equity

             For the year ended, March 31, 20Y1

Balances, April 1, 20Y0                                     $180,000

Add: Additional capital                                         25,000

Add: Net Income (Note - 1)                                  47,630

                                                                         $252,630

Less: Drawings                                                     16,570

Balances, March 31, 20Y1                             $236,060

Note - 1

Net Income calculation = Revenues - Expenses

Net Income = Fees earned - (Office expense + Wages expense + Miscellaneous expense) = $73,450 - (1,240 + 23,550 + 1,030)

Net Income = $73,450 - $25,820

Net Income = $47,630