Answer:
2014 2015 Balance Sheet
$134,300 $50,640 Cash
$26,240 $19,390 Accounts Receivable
$3,160 $1,960 Office Supplies
$163,700 $71,990 TOTAL CURRENT ASSETS
$ 44,000 $ 44,000 Office Equipment
$ 148,000 $ 157,000 Trucks
$ 0,000 $ 60,000 Land
$ 0,000 $ 80,000 Buildings
$192,000 $341,000 TOTAL NON CURRENT ASSETS
$355,700 $412,990 TOTAL ASSETS
$3,500 $33,500 Accounts Payable
$0,000 $40,000 Note Payable
$3,500 $73,500 TOTAL CURRENT LIABILITIES
$0,000 $0,000 TOTAL NON CURRENT LIABILITIES
$3,500 $73,500 TOTAL LIABILITIES
$282,200 $304,490 Equity
$35,000 $35,000 Retained Earnings
$35,000 $0,000 Owner Investment
$352,200 $339,490 TOTAL EQUITY
$355,700 $412,990 TOTAL EQUITY + LIABILITIES
Explanation:
- Equity, December 31, 2014Add: Owner's investment35,000Add: Net income35,000
When the investor add capital to the company it increases the cash account because it put money into the company and as counter account you have to increase equity to keep the accounting equation.
In the case that you keep in the company the Net Income, in this case the investor has the right of taking the money as dividend and retire the money of the company, but if the investor leave the money at the company by the Net Income it means that the company increase its retained earnings accounts with the counter account of cash as asset.
- Owner WithdrawalsEquity, December 31, 2015$35,000
Here it's the opposite situation as before, and here the investor withdraw the money from the company, it means him get the cash and decrease the equity.
