Company Background: Sunrise Bakery

Sunrise Bakery is a locally-owned bakery located in a suburban neighborhood. It was founded by Maria
Rodriguez in April 2019. The bakery is known for its freshly baked bread, pastries, and cakes. Over the years,
Sunrise Bakery has gained a loyal customer base in the community.

Financial Details:
As of January 1, 2022, the company's financial position was as follows:

o Common Stock (Maria Rodriguez): 60,000

o Retained Earnings: 25,000 (accumulated profits from previous years)
o Net Income for the year 2022: 18,000
o Maria Rodriguez's withdrawals: 6,000

Sunrise Bakery's fiscal year ends on December 31.

Sunrise Bakery
Statement of Changes in Owner's Equity
For the Year Ended December 31, 2022

Beginning Owner's Equity: 85,000

(Maria's Common Stock: 60,000 + Retained Earnings: 25,000)

Owner's Contributions: +0
(No additional investment during the year)

Net Income: +18,000

(Profit earned during the year)

Withdrawals (Maria): -6,000

(Maria's personal withdrawals)

Ending Owner's Equity: 97,000

(Beginning Owner's Equity + Contributions + Net Income - Withdrawals)

Explanation of Each Component:

Beginning Owner's Equity: This is the owner's equity balance at the start of the year, which includes the
initial investment by the owner (Common Stock) and the accumulated profits from previous years (Retained
Earnings).

Owner's Contributions: In this scenario, there were no additional investments made by the owner during
the year, so the value is 0.

Net Income: Sunrise Bakery earned a net income of 18,000 during the year 2022. This figure is the result of
subtracting expenses from total revenue. Net income positively affects owner's equity.

Withdrawals (Maria): Maria Rodriguez withdrew 6,000 from the company for personal use. This amount is
subtracted from her portion of the owner's equity since it reduces the company's available resources.

Ending Owner's Equity: The calculated owner's equity balance at the end of the year. It's the sum of the
beginning owner's equity, owner's contributions, net income, and any adjustments due to withdrawals. In this
example, the ending owner's equity is 97,000.

This Statement of Changes in Owner's Equity provides insight into how various financial events impacted the
owner's equity of Sunrise Bakery throughout the year. Please note that real-world financial statements can be
more complex and detailed. Always ensure accuracy and compliance with accounting standards when
preparing financial statements. If you're not familiar with financial reporting, consulting a professional
accountant is recommended.
Company Background: Sunrise Bakery
Sunrise Bakery is a locally-owned bakery located in a suburban neighborhood. It was founded by Maria
Rodriguez in April 2019. The bakery is known for its freshly baked bread, pastries, and cakes. Over the years,
Sunrise Bakery has gained a loyal customer base in the community.

Financial Details:
As of January 1, 2022, the company's financial position was as follows:

o Common Stock (Maria Rodriguez): 60,000

o Retained Earnings: 25,000 (accumulated profits from previous years)
o Net Income for the year 2022: 18,000
o Maria Rodriguez's withdrawals: 6,000

Sunrise Bakery's fiscal year ends on December 31.

Sunrise Bakery
Statement of Changes in Owner's Equity
For the Year Ended December 31, 2022

Beginning Owner's Equity: 85,000

(Maria's Common Stock: 60,000 + Retained Earnings: 25,000)

Owner's Contributions: +0
(No additional investment during the year)

Net Income: +18,000

(Profit earned during the year)

Withdrawals (Maria): -6,000

(Maria's personal withdrawals)

Ending Owner's Equity: 97,000

(Beginning Owner's Equity + Contributions + Net Income - Withdrawals)

This Statement of Changes in Owner's Equity provides insight into how various financial events impacted the
owner's equity of Sunrise Bakery throughout the year. Please note that real-world financial statements can be
more complex and detailed. Always ensure accuracy and compliance with accounting standards when
preparing financial statements. If you're not familiar with financial reporting, consulting a professional
accountant is recommended.