Basics: No unrestricted earnings; no dividends

Asset=* L + Stock Holders Equity Stockholder's Equity=* Sum of Paid Up Capital + Reatined earnings

Common Shares 400,000 Note

Example: 1.
Assets Liabilities Retained Earnings
Cash 100,000 Loan 800,000 Add Income 1
Properties 1,000,000 Less Net Loss
Investment 500,000 Stockholder's Equity 800,000 Less Dividends
Total 1,600,000 Total 1,600,000 RETAINED EARNINGS ENDING 400,000
Stock Holders Equity 800,000.00
Add Liability 800,000.00
TOTAL ASSETS 1,600,000.00

Retained Earning Beginning 0

Net Income
RETAINED EARNINGS ENDING
110,000
110,000
2
Add Liability 800,000
Stock Holders Equity 400,000
1,310,000
tes:
1. For Common Shares, consider only paid up capital and no subscribed capital

Laging zero sa first year of operations

Ito ay yung Common Shares na 400,000 na nasa taas