Change in stockholders'
Ending stockholders' equity - Beginning stockholders'
$32,000 - $23,000
Since the result is positive, the change in stockholders' equity is an increase.
Next, determine why stockholders' equity increased by $9,000. Since
stockholders' equity is affected by
issuance of stock
, revenues, expenses, and
dividends, we must determine which item caused the change in stockholders'
Calculate what caused stockholders' equity to increase by $9,000. The
following equation may be used to determine why stockholders' equity increased.
Increase in stockholders'
=Issuance of stock + Revenues - Expenses -
To solve for Issuance of stock, modify the equation as follows.
=Increase in stockholders' equity - Revenues + Expenses +
=$9,000 - $12,200 + $6,000 + $3,900.