The owner’s equity statement reports the changes in owner’s equity for a specific
period of time. The time period is the same as that covered by the income statement.
Data for the preparation of the owner’s equity statement come from the
owner’s equity columns of the tabular summary (Illustration 1-8) and from the income
statement. The first line of the statement shows the beginning owner’s
equity amount (which was zero at the start of the business). Then come the
owner’s investments, net income (or loss), and the owner’s drawings. This statement
indicates why owner’s equity has increased or decreased during the period.
What if Softbyte had reported a net loss in its first month? Let’s assume that
during the month of September 2010, Softbyte lost $10,000. Illustration 1-10 shows
the presentation of a net loss in the owner’s equity statement.
period of time. The time period is the same as that covered by the income statement.
Data for the preparation of the owner’s equity statement come from the
owner’s equity columns of the tabular summary (Illustration 1-8) and from the income
statement. The first line of the statement shows the beginning owner’s
equity amount (which was zero at the start of the business). Then come the
owner’s investments, net income (or loss), and the owner’s drawings. This statement
indicates why owner’s equity has increased or decreased during the period.
What if Softbyte had reported a net loss in its first month? Let’s assume that
during the month of September 2010, Softbyte lost $10,000. Illustration 1-10 shows
the presentation of a net loss in the owner’s equity statement.
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