Question

The revenues and expenses of Zenith Travel Service for the year ended August 31, 20Y4, follow:
Fees earned $899,600
Office expense 353,800
Miscellaneous expense 14,400
Wages expense 539,800
Prepare a statement of owner's equity for the year ended August 31, 20Y4.
Megan Cox, the owner, invested an additional $43,200 in the business during the year and withdrew cash of $21,600 for personal use. Megan Cox, capital as of September 1, 20Y3, was $456,000.
Zenith Travel Service
Statement of Owner's Equity
For the Year Ended August 31, 20Y4

Answer 1

Answer:

Zenith Travel Service

Statement of Owner's Equity for the year ended August 31, 20Y4:

Capital as of September 1, 20Y3 = $456,000

Additional investment                          43,200

Retained Earnings                                 (8,400)

Drawings                                              (21,600)

Capital as of August 31, 20Y4        $469,200

Explanation:

a) Data and Calculations:

Additional investment = $43,200

Personal withdrawal = $21,600

Income Statement for the year ended August 31, 20Y4:

Fees earned                                  $899,600

Office expense            353,800

Miscellaneous expense 14,400

Wages expense          539,800     908,000

Net income/Retained earnings      ($8,400)

b) Zenith's statement of owner's equity is a financial statement that reports the changes in the equity section of Zenith's balance sheet during the year ended August 31, 20Y4. In other words, it reports the events that increased or decreased Megan Cox's equity over the course of the year from September 1, 20Y3 to August 31, 20Y4.

Answer 2

                      Zenith Travel Service

                          Income statement

             For the Year ended August 31, 20Y4

Particulars                                                Amount

Fees earned                                            $899,600  

Expenses:      

Office expense                  $353,800  

Miscellaneous expense    $14,400    

Wages expense                 $539,800    

Total expenses                                         $908,000

Net loss                                                   -$8,400    

                            Zenith Travel Service

                        Statement of Owner's Equity

                   For the Year ended August 31, 20Y4

Megan Cox Capital as of September 1,20Y3                     $456,000

Additional investment by owner during the year  $43,200

Net loss for the year                                                 $8,400

Withdrawals                                                               $21,600  

increase in owner's equity                                                         $13,200

Megan Cox Capital as of August 31,20Y4                              $469,200

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