THREE EQUITY ACCOUNTING SYSTEMS. Assume that there are three firms engaged in the same business. One business is organized as a proprietorship, the second is organized as a partnership, and the third is organized as a corporation. The three businesses were all formed on January 1, 19x4. Each business had beginning

/ equity of $500,000 that was contributed by the owner or owners. For 19x4 the following data are available:

REQUIRED:
1. Calculate 19x4 net income for each of the three businesses.
2. Prepare a statement of changes in equity or retained earnings for 19x4 for each business.

Transcribed Image Text:

Revenues Salary paid to owner(s)* Other operating expenses* Financial expenses Income taxes expensest *Not included in other operating expenses. PROPRIETORSHIP AND PARTNERSHIP CORPORATION $820,000 $820,000 30,000 30,000 700,000 700,000 50,000 50,000 Proprietorship and partnership are not taxed directly. Additional distributions to owners are $10,000. 6,000