Baker’s Bread Shop was established on 1 April 2013 with an initial investment of $200 000 by the owner. The owner purchased land and building to use for the business which was funded partly by the owners’ initial investment and a mortgage which is due and payable in 2015. During the first month of business, the owner employed a part-time record-keeper who listed the business’s assets at 30th April as follows:

Account Balance at 30th April
Accounts payable $ 47 100
Buildings 200 000
Cash at bank 41 000
Furniture 22 000
A. Baker, Capital 250 000
Baking supplies 6 600
Loan payable 30 700

The record-keeper noted that the loan is due in 2016 and listed the business’s liabilities and equity as follows:

Account Balance at 30th April
Accounts receivable $30 000
Land 53 200
Mortgage payable 50 000
Cash drawings by A. Baker 46 000

How do I calculate the profit made by the business during the first month if the owner had invested an additional 30,000 into the business on the 28th April.

And also to prepare a changes in equity for that period.

I'm totally confuse as my findings does not match up. Thanks for your help.

First add all of your assets together. This will be your total assets.

Next add all of your liabilities together. This is your total liabilities.

Now subtract your liabilities from your assets. This is your Owners Equity.

You have to account for the amount in Owners Equity. So start with the initial investment and add the additional investment, next subtract out the drawings amount and what is left over is your profit for the month.