1. © 2014 Cengage Learning. All Rights Reserved.
Learning Objectives
LO3 Prepare a distribution of net income statement for a partnership.
LO4 Prepare an owners’ equity statement for a partnership.
© 2014 Cengage Learning. All Rights Reserved.

2. Distribution of Net Income Statement
Lesson 23-2
Distribution of Net Income Statement
LO3
A partnership financial statement showing net income or loss distribution to partners is called a distribution of net income statement.

3. Distribution of Net Income Statement
Lesson 23-2
Distribution of Net Income Statement
LO3
Heading 1 3
First Partner’s Share of Net Income 2
Name of First Partner 5
Second Partner’s Share of Net Income 4
Name of Second Partner 6
Words Net Income 7
Total Net Income 8
Double Rules

4. Distribution of Net Income Statement with Unequal Distribution
Lesson 23-2
Distribution of Net Income Statement with Unequal Distribution
LO3

5. Partners’ Capital and Drawing Accounts
Lesson 23-2
Partners’ Capital and Drawing Accounts
LO3
A financial statement that summarizes the changes in owners’ equity during a fiscal period is called an owners’ equity statement.
Business owners can review an owners’ equity statement to determine if owners’ equity is increasing or decreasing and what is causing the change.

6. Factors That Can Change Owners’ Equity
Lesson 23-2
Factors That Can Change Owners’ Equity
LO3
Additional investments
Withdrawals
Net income or net loss

7. Information Obtained from Each Partner’s Capital and Drawing Account
Lesson 23-2
Information Obtained from Each Partner’s Capital and Drawing Account
LO3
Beginning capital amount
Any additional investments made during the fiscal period
Each partner’s withdrawal of assets during the fiscal period

8. Partners’ Capital and Drawing Accounts
Lesson 23-2
Partners’ Capital and Drawing Accounts
LO3

9. Owners’ Equity Statement
Lesson 23-2
Owners’ Equity Statement
LO4
Heading 1 2
Name of First Partner 3
First Partner’s Ending Capital 4
Name of Second Partner 5
Second Partner’s Ending Capital 6
Total Owners’ Equity 7
Double Rules

10. Owners’ Equity Statement with an Additional Investment and a Net Loss
Lesson 23-2
Owners’ Equity Statement with an Additional Investment and a Net Loss
LO4

11. Balance Sheet for a Partnership
Lesson 23-2
Balance Sheet for a Partnership
LO4

12. Lesson 23-2 Audit Your Understanding
1. What information used to prepare an owners’ equity statement is obtained from the distribution of net income statement?
ANSWER
Each partner’s share of net income or net loss

13. Lesson 23-2 Audit Your Understanding
2. What information used to prepare an owners’ equity statement is obtained from the partners’ capital and drawing accounts?
ANSWER
Beginning capital amount, any additional investments made during the fiscal period, and each partner’s withdrawal of assets during the fiscal period

14. Lesson 23-2 Audit Your Understanding
3. What is the procedure for calculating an owner’s end-of-year capital?
ANSWER
Compute ending capital as follows: Share of Net Income less Withdrawals equals Net Increase in Capital. Beginning Capital plus Net Increase in Capital equals Ending Capital.