Question: Tim's Tee Shirts started business in 2016 with total assets of $40,000 and total liabilities of $26,000. At the end of 2016, Tim's Tee Shirts

Tim's Tee Shirts started business in 2016 with total assets of $40,000 and total liabilities of $26,000. At the end of 2016, Tim's Tee Shirts total assets were $53,000 and total liabilities were $16,000.

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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