Opening Balance of Equity in the Statement of Changes in Equity
Q: So how do you find the beginning capital or opening balance of equity to put in the statement of changes in owners equity?
A: Good question.
The opening balance of owners equity for one year is the closing balance for equity from the previous year .
The opening balance of owners equity can be found by looking at the closing balance from the previous year.
This can be found either in the statement of changes in equity from the previous year, or in the balance sheet from that year.
This $25,800 would be inserted as the opening balance of equity in the statement of changes in equity for the year ended 2011.
If you're studying accounting and come across a question or exercise about the statement of changes in equity, then the opening balance of equity is usually provided either as a note in the question itself or by providing the previous year's balance sheet .
Hope that makes it a bit clearer.
Best,
Michael C.
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