Chapter 1, Problem E1.21E

To determine

Concept Introduction:

Accounting Equation:

There is a basic accounting equation also known as a balance sheet equation which is a relationship between assets, liabilities and equity. For each transaction there is a debit equal’s credit which is the base of the accounting equation.

Balance Sheet:

A Balance Sheet is a part of financial statements which reflects entity’s assets, liabilities and equity at a specific point of time. In Balance Sheet the following equation prevails:

Total Assets = Total Liabilities + Total Equity

To Compute:

The amount of net income or net loss during June 2016