• June 1: Owner contributed $50,000 in cash to the business.

Question

• June 1: Owner purchased a company vehicle in the amount of $15,000.
• June 3: Owner took out a small business loan in the amount of $25,000.
• June 5: Owner paid rent for June, and prepaid office rent for a 6-month period to cover July through December at $1,195 per month.
• June 5: Owner paid business license fees in the amount of $250 to the county.
• June 5: Owner ordered office supplies, on account, in the amount of $750.00.
• June 6: Owner performed service for client on account in the amount of $1,000.
• June 9: Owner provided service for client in the amount of $1,500. Customer paid $750 at time of service. Client will be billed for the balance due.
• June 10: Owner paid $250 in advertising costs to the local paper.
• June 15: Owner recorded wages due to the part-time employee in the amount of $325. This will be paid on June 20.
• June 15: Owner prepaid business insurance to cover July through December at the rate of $125 per month.
• June 20: Owner paid wages due to part-time employee from period ending June 15.
• June 21: Owner paid for plumbing repairs in the office in the amount of $210.
• June 22: Owner withdrew $1,000 cash for personal use.
• June 23: Customer paid balance due from June 6 service in the amount of $1,000.
• June 25: Owner provided service to client in the amount of $800. Client paid at time of service.
• June 28: Owner paid balance due for office supplies purchase on June 5.
• June 29: Owner performed service for client on account in the amount of $2,225.00.
• June 30: Owner received telephone bill for month of June in the amount of $155 and recorded the expense. This bill will not be paid until July.
• June 30: Last day of pay period; owner owes part-time worker $325 for the June 16 through June 30 pay period. This will be paid on July 5.
• June 30: Record depreciation on vehicle at $250.
make me a statement of owners equity

Answer 1

To create a statement of owner's equity, we begin by calculating the total changes in the owner's equity account based on the transactions for June. The statement of owner's equity typically includes the owner's contributions, withdrawals, net income (or loss) for the period, and any adjustments (such as depreciation).

Here’s a simplified structure for the statement of owner's equity for the month of June:

Statement of Owner's Equity

For the Month Ended June 30, 2023

| Description | Amount | |-------------------------------|-------------| | Beginning Owner's Equity | $0 | | Add: Owner Contributions | $50,000 | | Add: Net Income | $2,950 | | Less: Owner Withdrawals | $(1,000) | | Ending Owner's Equity | $51,950 |

Breakdown of Calculations for Net Income:

1. Service Revenue:

   • Revenue from services performed:
     • June 6: $1,000
     • June 9: $1,500 (of which $750 was paid immediately, $750 is receivable)
     • June 10: $0 (already counted in cash)
     • June 25: $800
     • June 29: $2,225 (on account)
   • Total Service Revenue = $1,000 + $1,500 + $800 + $2,225 = $5,525

2. Expenses:

   • Rent Expense:
     • 1 month of rent for June = $1,195
   • Advertising Expense: $250
   • Wages Expense:
     • Wages due (June 15) = $325 (for June 1-15)
     • Wages due (June 30) = $325 (for June 16-30)
     • Total Wages Expense = $325 + $325 = $650
   • Plumbing Repairs Expense: $210
   • Telephone Expense: $155
   • Depreciation Expense on Vehicle: $250
   • Business License Fee: $250
   • Insurance Expense for June (one month): $125 (prepaid for 6 months; $125 * 1 = $125)

   Total Expenses = $1,195 + $250 + $650 + $210 + $155 + $250 + $125 = $2,835

3. Net Income Calculation:

   • Net Income = Total Revenue - Total Expenses
   • Net Income = $5,525 - $2,835 = $2,690

Final Calculation of Statement of Owner's Equity:

1. Owner Contributions: $50,000
2. Net Income: $2,690
3. Owner Withdrawals: $(1,000)

Thus, the Ending Owner's Equity is:

• $50,000 + $2,690 - $1,000 = $51,690.

Revised Statement of Owner's Equity

For the Month Ended June 30, 2023

| Description | Amount | |-------------------------------|-------------| | Beginning Owner's Equity | $0 | | Add: Owner Contributions | $50,000 | | Add: Net Income | $2,690 | | Less: Owner Withdrawals | $(1,000) | | Ending Owner's Equity | $51,690 |

This statement provides a clear overview of how the owner's equity has changed during the month of June 2023.