Answered

Find expert answers and community-driven knowledge on IDNLearn.com. Our experts are available to provide in-depth and trustworthy answers to any questions you may have.

As of December 31 of the current year, Armani Company's records show the following. Hint: The owner invested [tex]$\$[/tex] 2,100[tex]$ cash during the year.

\[
\begin{array}{lr}
\text{Cash} & \$[/tex] 11,100 \\
\text{Accounts receivable} & 10,100 \\
\text{Supplies} & 7,100 \\
\text{Equipment} & 6,100 \\
\text{Accounts payable} & 13,200 \\
\text{Armani, Capital, December 31, prior year} & 17,100 \\
\text{Armani, Capital, December 31, current year} & 21,200 \\
\text{Armani, Withdrawals} & 14,100 \\
\text{Consulting revenue} & 35,200 \\
\text{Rental revenue} & 24,200 \\
\text{Salaries expense} & 21,100 \\
\text{Rent expense} & 13,100 \\
\text{Selling and administrative expenses} & 9,100 \\
\end{array}
\]

Required:
Prepare the statement of owner's equity for Armani Company for the current year ended December 31.

[tex]\[
\begin{array}{|l|l|}
\hline \multicolumn{2}{|c|}{\text{ARMANI COMPANY}} \\
\hline \multicolumn{2}{|c|}{\text{Statement of Owner's Equity}} \\
\hline \multicolumn{2}{|c|}{\text{For the Current Year Ended December 31}} \\
\hline \text{Armani, Capital, December 31, prior year} & 17,100 \\
\hline \text{Add: Owner's investment} & 2,100 \\
\hline \text{Add: Net income} & \\
\hline \text{Less: Withdrawals} & (14,100) \\
\hline \text{Armani, Capital, December 31, current year} & 21,200 \\
\hline
\end{array}
\][/tex]

(Note: The net income should be calculated as the difference between total revenues and total expenses, which is missing from the provided data and needs to be filled in.)

Sagot :

GinnyAnsweridn
Certainly! Let's prepare the statement of owner's equity for Armani Company for the current year ended December 31.

The statement of owner's equity includes the starting capital, additional investments made by the owner, net income or net loss for the year, withdrawals by the owner, and the ending capital. We have all the required information to complete this statement.

### ARMANI COMPANY
### Statement of Owner's Equity
### For Current Year Ended December 31

[tex]\[ \begin{array}{|l|l|} \hline Armani, Capital, December 31, prior year & \$17{,}100 \\ \hline Add: Owner's investment during the year & \$2{,}100 \\ \hline Add: Net Income for the year & \$16{,}100 \\ \hline Total & \$35{,}300 \\ \hline Less: Owner's withdrawals & \$14{,}100 \\ \hline Armani, Capital, December 31, current year & \$21{,}200 \\ \hline \end{array} \][/tex]

Here is a detailed step-by-step breakdown:
1. Armani, Capital, December 31, prior year: This is the starting capital from the previous year, which is \[tex]$17,100. 2. Add: Owner's investment during the year: The owner invested an additional \$[/tex]2,100 during the year.
3. Add: Net Income for the year: We calculate the net income for the year by subtracting total expenses from total revenues.
- Total revenues: Consulting revenue (\[tex]$35,200) + Rental revenue (\$[/tex]24,200) = \[tex]$59,400 - Total expenses: Salaries expense (\$[/tex]21,100) + Rent expense (\[tex]$13,100) + Selling and administrative expenses (\$[/tex]9,100) = \[tex]$43,300 - Net Income: Total revenues (\$[/tex]59,400) - Total expenses (\[tex]$43,300) = \$[/tex]16,100
4. Total combination of prior year capital, investments, and net income: \[tex]$17,100 (prior year capital) + \$[/tex]2,100 (owner's investment) + \[tex]$16,100 (net income) = \$[/tex]35,300
5. Less: Owner's withdrawals: The owner withdrew \[tex]$14,100 during the year. 6. Armani, Capital, December 31, current year: Finally, we compute the ending capital by subtracting the owner's withdrawals from the total. Thus, \$[/tex]35,300 - \[tex]$14,100 = \$[/tex]21,200

Therefore, the ending capital for Armani Company as of December 31 of the current year is \$21,200.
We are delighted to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. IDNLearn.com is your go-to source for dependable answers. Thank you for visiting, and we hope to assist you again.