Chapter 13, Problem 5Q

(a)

To determine

Stockholders’ Equity: It is the amount which is invested by the stockholder’s in business, it also includes any earnings generated by the business operations. The formula to calculate stockholder’s equity is,

$\text{Stockholder's}\text{Equity}=\text{Total}\text{Assets}-\text{Total}\text{Liabilities}$

To Explain: two principal components of stockholder’s equity

(b)

To determine

To Explain: paid in capital and its three examples.