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1. While the Statement of Stockholders' Equity is one of the four basic financial statements, it is not always prepared in full for every company.

The balance sheet is made up of 3 sections: Assets, Liabilities, and Stockholders' Equity. The Statement of Stockholders' Equity shows the changes that took place in equity throughout the year. For many companies, the only change is an increase/decrease due to their net income/loss. In this instance, instead of preparing a full Statement of Stockholders' Equity, many companies will just include on their Income Statement a couple lines for beginning equity end ending equity. In this way the users of the financial statements can still see how equity changed, but there is no need for a full statement.

What sorts of transactions can occur that would cause there to be a need for a full Statement of Stockholders' Equity?

Solution Preview

1. While the Statement of Stockholders' Equity is one of the four basic financial statements, it is not always prepared in full for every company.

The balance sheet is made up of 3 sections: Assets, Liabilities, and Stockholders' Equity. The Statement of Stockholders' Equity shows the changes that took place in equity throughout the year. For many companies, the only change is an increase/decrease due to their net income/loss. In this instance, ...

Solution Summary

This solution discuss stockholder's equity by means of transactions.

$2.19