Alec s Designs started business in 2012 with total assets of
Alec’s Designs started business in 2012 with total assets of $25,000 and total liabilities of $20,000. At the end of 2012, Alec’s Designs’ total assets were $65,000, and total liabilities were $12,000.
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.

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