Increases In Stockholders' Equity

The Stockholders' equity increases when the company receives income or when it receives contributions Additional Capital.

Income. They are the profits generated by the goods or services provided by the company.

Additional Capital Contributions. They are the deliveries in cash or in kind that the investor makes to increase their own Capital, or those that the partners make to increase the original investment of the Social Capital.

Increases in Stockholders' Equity that produce both income and additional contributions of Capital increase Assets or decrease Liabilities. Examples:

1. Rents amounting to $ 40,000.00 were collected in cash
+ Asset in Cash... $ 40 000.00
+ Capital from Income (rents collected)... 40 000.00

2. A supplier was paid our debt of $ 50,000.00 from the commission we earned from selling merchandise he owned.
- Liabilities in Suppliers... $ 50 000.00
+ Capital from Income (commissions earned)... $ 50 000.00

3. The owner of the company increased his Capital with a cash delivery of $ 30,000.00.
+ Asset in Cash... $ 30 000.00
+ Capitaf by Additional contribution... 30 000.00