Components of Stockholders’ Equity
In a corporation’s balance sheet, owners’ claims are called stockholders’ equity.
The equity section is divided into two parts.
1. Contributed Capital.
- Investments made by stockholders.
- Provides information about the corporation’s stock, such as types; par value; number of shares authorized, issued, and outstanding.
- 2. Retained Earnings.
- Earnings reinvested in the corporation.