LEARNING ACCOUNTING LESSON 3

Statement of owner's equity:

The statement of owner's equity is prepared after the income statement. It shows the beginning and ending owner's equity balances and the items affecting owner's equity during the period. These items include investments, the net income or loss from the income statement, and withdrawals. Because the specific revenue and expense categories that determine net income or loss appear on the income statement, the statement of owner's equity shows only the total net income or loss. Balances enclosed by parentheses are subtracted from unenclosed balances.

The Greener Landscape Group Statement of Owner's Equity For the Month Ended April 30, 20X2 J. Green, Capital, April 1 $ 0 Additions     Investments $15,000     Net Income 61 15,061 Withdrawals (50) J. Green, Capital, April 30 $ 15,011

Balance sheet:

 The balance sheet shows the balance, at a particular time, of each asset, each liability, and owner's equity. It proves that the accounting equation(Assets = Liabilities + Owner's Equity) is in balance. The ending balance on the statement of owner's equity is used to report owner's equity on the balance sheet.

The Greener Landscape Group Balance Sheet April 30, 20X2  ASSETS Current Assets     Cash $ 6,355     Accounts Receivable 200     Supplies 25     Prepaid Insurance 1,100       Total Current Assets 7,680 Property, Plant, and Equipment     Equipment $18,000     Less: Accumulated Depreciation (235) 17,765       Total Assets $25,445 LIABILITIES AND OWNER'S EQUITY Current Liabilities     Accounts Payable $ 50     Wages Payable 80     Interest Payable 79     Unearned Revenue 225       Total Current Liabilities 434 Long-Term Liabilities     Notes Payable 10,000       Total Liabilities 10,434 Owner's Equity     J. Green, Capital 15,011       Total Liabilities and Owner's Equity $25,445