John Franklin, sole owner of Franklin Mattress Company, has an ownership interest in the company of $50,000

Question:

John Franklin, sole owner of Franklin Mattress Company, has an ownership interest in the company of $50,000 at January 1, 2011. During that year, he invests an additional $10,000 in the company and the company reports a net income of $25,000. Determine the balance of owners’ equity that will appear in the balance sheet at the end of the year, and explain how the amount of net income articulates with that figure in the balance sheet.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...