Basic accounting equation (Learning Objective 5 ) 10–15 min.

Lynne’s Designs started business in 2014 with total assets of $37,000 and total liabilities of $16,000. At the end of 2014, Lynne’s Designs’ total assets were $82,000 and total liabilities were $28,000.

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.

AppendixLO1