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    Effect of Accounting Events on Sole Proprietorship

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    A sole proprietorship was started on January 1, 2014, when it received $30,000 cash from Alex Ard, the owner. During 2014, the company earned $50,000 in cash revenues and paid $22,300 in cash expenses. Ard withdrew $10,000 cash from the business during 2014.

    Prepare the income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for Ard's 2014 fiscal year.

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    Solution Preview

    Since this is a sole proprietorship, a capital statement has been prepared, not a statement of changes in equity, which is for corporations.

    See attached file for complete workings for the solution.

    Ard Sole Proprietorship
    Income statement
    For the Year Ended December 31, 2014
    Description Amount ($)
    Revenue ...

    Solution Summary

    This solution contains all financial statements (income statement, capital statement, balance sheet, and statement of cash flows) for the accounting effects of a sole proprietorship in a pdf file. An Excel worksheet showing all computations for the statements is also provided.