The stock holder’s equity section of the balance sheet represents the investment of the ownership in the net assets of a business entity. While the claims of the ownwership are junior to those in the current and long term liability section of the balance sheet. They represent on the other hand residual elemis to all assets. Once the claims of creditor have been satisfied while being exposed to the maximum risk associated with the enterprise the ownership is entitled to all the residual rewards that are associated with it. Owner’s equity statement represents all the items relate to ownership interest of the Firm.
1) Beginning Balance of Stockholder’s Equity
2) Transactions with shareholders.
a) Share Issues b) Share Repurchase C) Common Stock Dividend.
3) Effects of operations and Non-o-equity Financing
a) Net income/ Net loss, b) Other comprehensive income
i) Unrealized Gain, ii) Currency Translation Gain/ Loss, iii) Gain of gang instruments.
c) Preffered Stock Dividend
d) Preferred Stock retired.