How can I find the retained earning after divedends. Give me an example to understand it and also how can I find the total stock holder equity.

Again as this is homework please post it in the appropreate section: Finance & Accounting - Ask Me Help Desk

Here is a hint:

When you declare a dividend you:

Db Retained Earnings
Cr Dividends payable

Quote:

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Originally Posted by codyman144

Again as this is homework please post it in the appropreate section: Finance & Accounting - Ask Me Help Desk

Here is a hint:

When you declare a dividend you:

Db Retained Earnings
Cr Dividends payable

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I did not understand it . Sorry, but it is true.Thank you

Retained earnings is a stockholder equity account it normally has a credit balance. When you declare dividends you need to book the liability (Dividends payable).

Dividends are paid out of retained earnings. Therefore you Db RE to reduce.

To find total stockholders equity you just add up all the equity accounts.

I just want to make sure that am I doing it right or not.. Tell me please
On June 30, 2008, Sharper Corporation's common stock is priced at $31 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows.



Common stock—$6 par value, 75,000 shares authorized, 30,000 shares issued and outstanding

$
180,000


Paid-in capital in excess of par value, common stock


100,000


Retained earnings


280,000


Total stockholders' equity

$
560,000



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Requirement 1:

Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares (Omit the "$" sign in your response).


a.
What is the retained earnings balance?
I think it is 0.


What is the amount of total stockholders' equity?
About $560,000

How many shares are outstandingAFTER DIVIDENDS?

30,000





Requirement 2:

Assume that the company implements a 3-for-2 stock split instead of the stock dividend in part 1. Answer these questions about stockholders' equity as it exists after issuing the new shares. (Omit the "$" sign in your response):


a.
What is the retained earnings balance?
$140,000





What is the amount of total stockholders' equity?

It is about $280,000

How many shares are outstanding?
THESE ARE 15,000

Quote:

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Originally Posted by codyman144

Retained earnings is a stockholder equity account it normally has a credit balance. When you declare dividends you need to book the liability (Dividends payable).

Dividends are paid out of retained earnings. Therefore you Db RE to reduce.

To find total stockholders equity you just add up all the equity accounts.

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Quote:

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Originally Posted by moonkhan

I just want to make sure that am I doing it right or not ..Tell me please
On June 30, 2008, Sharper Corporation's common stock is priced at $31 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows.



Common stock—$6 par value, 75,000 shares authorized, 30,000 shares issued and outstanding

$
180,000


Paid-in capital in excess of par value, common stock


100,000


Retained earnings


280,000


Total stockholders' equity

$
560,000



--------------------------------------------------------------------------------

Requirement 1:

Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares (Omit the "$" sign in your response).


a.
What is the retained earnings balance?
I think it is 0.


What is the amount of total stockholders' equity?
About $560,000

How many shares are outstandingAFTER DIVIDENDS?

30,000

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Try again, the 100% stock dividend will double the amount of shares outstanding. Also you will need to Db Retained Earnings by the par value * number of shares issued.