How to Prepare a Statement of Stockholders Equity

Statement of Stockholders equity is one of important financial statement which is required in any company. Company will prepare a statement of stockholders equity by preparing other statements like income statement, balance sheet and statement of cash flow.

We can also say statement of stockholders equity as statement of equity or statement of shareholders' Equity. This statement shows all the fund which will rest after paying to all company's debt. As accountant of company, you should know the steps to prepare a statement of stockholders equity. Following is the Simple Step of preparing a statement of stockholders' equity.

1. Collect the Information what We Need

Following are the main information which we need to prepare a statement of stockholders' equity.

A. Opening Balance of Equity Stock and Preference Stock 

See the opening balance sheet of company. From opening balance sheet, you will find the opening balance of equity stock and preference stock. This will add in the statement of stockholders equity.

B. Treasury Stock 

If company will see the value of shares are decreasing day by day in the market. It will buy its own shares. So, it will pay to the stockholders. We will deduct this treasury stock from opening balance of our stock. When company will again issue the same treasury stock, we will again add in total stockholders equity.

C. New Issue of Preference and Equity Stock 

When company issues new preferences and equity stock. It will be called up and then if it is paid by stockholders, we will show it in the statement of  stockholders' equity. We will also add in total stockholders' equity.

D. Retained Earning 

All the retained earning which is current and past will be the part of total stockholders'equity and it will add in the statement of stockholders' equity.

2. Add Information in the Format of Statement of Stockholders' Equity 

Just open your ms excel. Make the format of this statement. Add your company's above information in this statement. Your statement of stockholders' equity is ready.

After adding information, statement of stockholders' equity will be shown like below. 







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Accounting Education: How to Prepare a Statement of Stockholders Equity
How to Prepare a Statement of Stockholders Equity
Accounting Education
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