Kablossom started business in 2013 with total assets of $35,000 and total liabilities of $32,000. At the end of 2013, Kablossom’s total assets were $65,000, and total liabilities were $20,000.

After analyzing the data, answer the following questions:

1. What was the amount of the increase or decrease in shareholders’ equity?

2. Identify three possible reasons for the change in shareholders’ equity during the year.