1. 5.3 Expanded Owner’s Equity Section of the Balance Sheet

2. Expanding the Owner’s Equity (OE) section of the balance sheet:
NET INCOME > DRAWINGS = INCREASE IN CAPITAL
E. Boa, Capital, June
Net Income
Drawings
Increase in Capital
E. Boa, Capital, June
Income Statement + -
Trial Balance

3. + - NET INCOME < DRAWINGS = DECREASE IN CAPITAL
E. Boa, Capital, January
Net Income
Drawings
Decrease in Capital
E. Boa, Capital, December + -

4. - - NET LOSS + DRAWINGS = DECREASE IN CAPITAL
E. Boa, Capital, January
Net Loss
Drawings
Decrease in Capital
E. Boa, Capital, June -
ADD -

5. Account Form Balance Sheet – Horizontal

6. Report Form Balance Sheet - Vertical
Liabilities + Owner’s Equity

7. 1) Despite drawings of $2 000 in the first 6 months of 2012, and a net income of $3 200, “Bright Stop Ltd.” was still in good shape at the end of June. The year had opened boasting a capital account of $39 000
Beginning Capital
Bright Stop Ltd., Capital, Jan Net Income Drawings Increase in Capital Bright Stop Ltd., Capital, June
Ending Capital

8. 2) Ms. S Henessey invested $ in her new business of “Wicher Imports” September 1, After 3 months of operation her accountant advised her that she had withdrawn $4 800 and earned a net income of $2 400.
S. Henessey, Capital, Sept Net Income Drawings Decrease in Capital S. Henessey, Capital, Dec

9. 3) The experimental self service drycleaning operation run by one of the Markus Brothers proved unsuccessful in the trial year. “Markus Cleaners” showed a net loss of $3 300 despite the enthusiastic initial capital investment of $ A mere $1 300 in drawings had been made during the year.
Markus Bros., Capital, Jan Net Loss Drawings Decrease in Capital Markus Bros., Capital, Dec

10. Complete the following exercises:
Do you have the following done?
Read 5.1 & answer review questions #1,2,6,9,10,11,18 p. 140 (t), p. 78 (w)
Section 5.1 Ex. #1, 2, 3 p (t), p (w)
Section 5.2 Ex. 1,2, 4, 5 p (t), p (w)
Today:
Section 5.3 Ex. 1, 2, 3 p. 157 (t), p (w)