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    snowwhitewonder's Avatar
    snowwhitewonder Posts: 1, Reputation: 1
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    #1

    Jul 13, 2014, 11:18 AM
    Finding Beginning owners equity
    I know the equation is:
    ending owners equity = beginning owners equity +owners contributions = net income(loss) + withdrawals

    but for some reason my brain doesn't want to figure out the rearrangement to get the beginning owners equity.

    Help?
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Jul 13, 2014, 12:33 PM
    The formula for finding changes in Owners Equity is:
    Ending Owners Equity = Beginning Owners Equity + Investments(owners contributions) + Net Income (revenues - expenses) - Withdrawals (Dividends)

    As long as you have all the above amounts except for one you can rearrange the formula to find the missing amount.

    So for Beginning Owners Equity the formula will be:
    Beginning Owners Equity = Ending Owners Equity - Investments (owner contributions) - Net Income + Withdrawals(dividends)
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