Your friend Chris Stevick started a part-time business in June and has been keeping her own accounting records. She has been preparing monthly financial statements. At the end of August, she stopped by to show you her performance for the most recent month. She prepared the following income statement and balance sheet:

Chris has also heard that there is a statement of owner's equity, but she is not familiar with that statement. She asks if you can help her prepare one. After confirming that she has no assets other than cash, no liabilities, and made no additional investments in the business in August, you agree.
REQUIRED
1. Prepare the statement of owner's equity for your friend's most recent month.
2. What suggestions might you give to Chris that would make her income statement moreuseful?

Transcribed Image Text:

Balance Sheet End of Month Beginning Income Statement of Month $600 600 $400 400 Revenues Expenses Net income Cash Capital $500 200 $300