Hello everyone, good evening!

I am a bit lost when calculating the statement of owner’s equity. There is the following problem on Aug 31:

R. Smistad, capital 65,750

R. Smistad, drawings 80,000

On July 18, 2021, R. Smistad invested $3,500 cash in the business.

Now, this is the bit that causes me confusion. Do I have to consider for Aug 1 the $65,750 and add the investment of $3,500, or only the $3,500?

Would appreciate any help to understand it better.

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