Accounting Bellwork3rd Hour: How does the When line of the heading of the Income Statement read.

For the Month Ended October 31, 200-

Section 2 The Statement of Changes in Owner’s Equity

What You’ll Learn

The purpose of the statement of changes in owner’s equity.

How to prepare the statement of changes in owner’s equity.

Why It’s Important

One way to evaluate how a business is performing is by tracking the increase or decrease in owner’s equity.

Section 2 The Statement of Changes in Owner’s Equity (con’t.)

Key Terms statement of changes in owner’s

equity

The Statement of Changes in Owner’s Equity

Statement of changes in owner’s

equity summarizes changes in the

owner’s capital account as a result of

business transactions during the

period.

Section 2 The Statement of Changes in Owner’s Equity (con’t.)

The Statement of Changes in Owner’s Equity (con’t.)

The information to prepare this statement is found in three places:

Section 2 The Statement of Changes in Owner’s Equity (con’t.)

the work sheet the income statement the owner’s capital account in the

general ledger

Same as worksheet WHEN

Money Started the month with.

Money or Items invested by owner

From the worksheet or Income Statement

From the Worksheet

To show a net loss, refer to p213.

Demonstration Problems Ch9

Problem 9-4

Prime Printing Co.Statement of Changes in Owners Equity

For the month ended June 30, 200-

8714.212500.--

4146.02

Beginning Capital, June 1, 200-

6646.02

Add: Investments by OwnerNet Income

Total Increases in CapitalSubtotalLess: Withdrawals by Owner

15360.23

Ending Capital, June 30, 2004600.--

14760.23

Check Your Understanding p214

Thinking Critically 1 & 2

Problem 9-2

Section 1 Preparing the Work Sheet (con’t.)