Question

please explain second part

why is additional capital subtracted and drawings added?​

Answer 1

Answer:

owner's drawings will affect the company's balance sheet by decreasing the asset that is withdrawn and by the decrease in owner's equity.

The owner's drawings of cash will also affect the financing activities section of the statement of cash flows. (If an asset other than cash is withdrawn, it is reported as supplemental information on the statement of cash flows.)

The income statement is not affected by the owner's drawings since the drawings are not business expenses.

Answer 2

Answer:

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Explanation: