Response to the following problem:
The accounting equation is:
Assets = Liabilities + Stockholders' Equity
Therefore, if assets increased by $20,000 and liabilities increased by $12,000, stockholders' equity must have increased by $8,000, as indicated in the following computation:
Assets = Liabilities + Stockholders' Equity
+ $20,000 = $12,000 + Stockholders' Equity
+ $20,000 - $12,000 = Stockholders' Equity
+ $8,000 = Stockholders' Equity