Issue stock, declare a dividend, buy back shares, split the stock — and watch which parts of equity move and whether the total does.
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The corporation as it stands today.
| Common stock | $100,000 |
| Paid-in capital in excess of par | $50,000 |
| Paid-in capital, treasury stock | $0 |
| Retained earnings | $200,000 |
| Treasury stock | ($0) |
| Total equity | $350,000 |
10,000
$10
Issuing stock brings in new assets — equity grows. A cash dividend and buying send assets back out — equity shrinks. Everything else in this walk just moves dollars between equity accounts, or changes share count, without touching the total.
above is credited to , never to Common stock itself. Reissuing treasury stock above its cost adds to a paid-in capital account too — never to income.