Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owner’s equity

Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owner’s equity for the year ended April 30, 2019. Jerome Foley, the owner, invested an additional $60,000 in the business during the year and withdrew cash of $40,000 for personal use. Jerome Foley, capital as of May 1, 2018, was $1,020,000. 

Answer:

ADVENTURE TRAVEL SERVICE

Statement of Owner’s Equity

For the Year Ended April 30, 2019

Jerome Foley, capital, May 1, 2018$1,020,000 Additional investment by owner during year $ 60,000 Net income for the year455,000 Withdrawals(40,000) Increase in owner’s equity475,000 Jerome Foley, capital, April 30, 2019$1,495,000