Okay, we've just completed the income statement for Sherry Shuttles. In this video, we're going to go through the statement of changes in equity. So the statement of changes in equity just says, how did our shareholders equity change during there?
How did the accounts classified as shareholders equity accounts change during the year? And to do it, we are going to need a three line title. So let's just start with our title very similar to that of the income statement. So the income statement, Sherry Shuttles income statement for the year ended December 31st, 2024. The statement of changes in equity, we're going to say Sherry Shuttles statement of changes in equity for the year ended December 31st, 2024. So exactly the same.
Name of the company, Sherry's Shuttles. Name of the financial statement, statement. of changes in equity. This could also be called the statement of changes in shareholders equity and a very similar related statement that you might see in your intro accounting textbook is statement of retained earnings. But we'll go statement of changes in equity here.
For the year ended December 31st, 20... 2024. Okay, we are ready to go. We list our equity accounts across the top.
And I know I just remember it. But in our intro class, we only do two equity accounts, common shares and retained earnings. Again, you might have preferred shares, and there's all sorts of other equity accounts you can get into in a more intermediate level accounting class. But for us, common shares and retained earnings.
earnings will be the two key columns as well as a totals column. Now the top line is going to be how much how many dollars worth of these common shares and how many dollars did we have in retained earnings at the beginning of the year. And we actually give a date here.
So what is the date of the beginning of this year? Well, the year end date is December 31 2024. The beginning of the year must have been January 1 2024. So there's not actually a I heading here other than the date January 1st 2024 and so what we want to say is how many dollars worth of shares did I have on January 1st 2024 let's scroll up to the question I'm going to undo the highlighting from before we're actually done with those now and let's highlight any equity accounts so we got common shares we got retained earnings it's got to be under here there it is there And we also have dividends. That's going to be relevant here. So under common shares, pardon me, on January 1st, you'll note the date here. These are the only two that got dated January 1st.
And the reason is we need that January 1st amount to do our statement of changes in equity. And under January 1st, common shares, $60,000. Retained earnings, $10,000.
So $60,000 for common shares. $10,000 for retained earnings, $70,000 for total. Okay, now we're going to add to this any shares that were issued.
We'll deduct from it any shares that were repurchased. Looking up here, it says the company did not issue or repurchase any common shares this year. So common shares isn't changing. Again, if we issued new shares, we would add those.
If we bought back our shares, as you hear, big companies are doing share buybacks, you would deduct. from your common shares. But just because our common shares didn't change and ours didn't, retained earnings will always change. It goes up by the amount of the profit.
So again, we had beginning retained earnings, we made profits. So that means there's more money to keep potentially within our company. And we deduct any dividends.
That's us saying, hey, we didn't want to retain those earnings in the company, we wanted to take them in the form of dividends. So that's the shareholders making that. decision. So we're always going to add net income.
And our net income here just comes from the income statement. So we have to do our income statement first, our net income was $20,700. We're going to deduct dividends, and the amount of our dividends was 3000. Just looking at that highlighted row up there.
Our total net income $20,700. Our total dividends $3,000. So we need grand totals here.
And this is what we had at the end of the year. This is December 31st, 2024. Our common shares didn't change. They started at $60,000.
There was no shares issued or repurchased. They ended at $60,000. Our retained earnings was $10,000 plus $20,000, so $30,700.
We took away $3,000 in dividends, leaving us $27,000. 700 and our total here 87,700. You can get that total by adding down so 70 plus 20 minus 3 or adding across 60 plus 27 is 87. Double underlines under all three lines these are final ending amounts.
Dollar sign at the top of each column and we have one two three columns. and dollar sign beside the bottom line of our financial statement right there. And there we have it.
We have prepared a good statement of changes in equity. In our next video, we'll tackle the balance sheet. Bye for now.