Margarets Bakeries started business in 2016 with total asset

Margaret\'s Bakeries started business in 2016 with total assets of $ 55 comma 000 and total liabilities of $ 40 comma 000. At the end of 2016?, Margaret\'s Bakeries?\' total assets were $ 69 comma 000?, and total liabilities were $ 14 comma 500. After analyzing the? data, answer the following? questions: 1.??What was the amount of the increase or decrease in? stockholders\' equity? 2.??Identify two possible reasons for the change in? stockholders\' equity during the year.

Solution

Stockholder equity 2016 beginning = 55000 - 40000 = 15000

Stockholder equity 2016 end = 69000 - 14500 = 54500

Change in stockholder equity = increase by (54500 - 15000) = 39500

Two possible reasons for increase in stockholder equity :

a) Increase in share capital through issuance of stock

b) Increase in net profit which increases the stockholder equity