How do you find Owners Equity?

Total owners equity, please help!?

• The company with the common equity accounts shown here has declared a 6 percent stock dividend at a time when the market value of its stock is $64 per share. Common stock ($1 par value) $ 520,000 Capital surplus $1,560,000 Retained earnings $3,888,000 --------------------------------------… Total owners’ equity $ 5,968,000 Show the new equity account balances after the stock dividend distribution. Common stock $ ? Capital surplus $? Retained earnings $? --------------------------------------… Total owners’ equity $?

• Answer:

  520,000 x 6% x 64 = $1,996,800 Total amount of dividend Dr Retained Earnings 1,996,800 Cr Capital Surplus 1,965,600 (520,000 x 6% x 63) Cr Common Stock 31,200 Common stock 520,000 + 31,200 = $551,200 Capital surplus 1,560,000 + 1,965,600 = $3,525,600 Retained earnings 3,888,000 - 1,996,800 = $1,891,200 --------------------------------------… Total owners’ equity $5,968,000 When a stock dividend is declared, total equity remains the same. Money is just being moved from one equity account to another.