Accounting Questions and Answers: EX 1-18 Statement of owner’s equity

Financial information related to Udder Products Company, a proprietorship, for the month ended April 30, 2019, is as follows:

Net income for April $166,000

Mark Kominksy’s withdrawals during April 25,000

Mark Kominksy’s capital, April 1, 2019 384,500

a. Prepare a statement of owner’s equity for the month ended April 30, 2019.

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

Answers:

Mark Kominksy, capital, April 1, 2019$384,500

Net income for April$166,000

Withdrawals(25,000)

Increase in owner’s equity141,000

Mark Kominksy, capital, April 30, 2019$525,500

b. The statement of owner’s equity is prepared before the April 30, 2019, balance

sheet because Mark Kominksy, Capital as of April 30, 2019, is needed for the

balance sheet.