1.

Assume that DC Corporation had the following information: the total capital contributed by
shareholders (paid-in-capital), $900,000; beginning retained earnings, $80,000; total revenues
generated during the period, $800,000; total expenses incurred during the period, $450,000; and
dividends paid to shareholders, $65,000. What will be the total shareholders’ equity?
Given
Shareholders total capital = $900,000
Beginning Retained earnings =$80,000
Total Revenue Generated = $800,000
Total Expense Incurred = $450,000
Dividends paid=$65,000
Required: Shareholder’s Equity
Solution
 As it is learned in a classroom shareholders’ equity is the one left from the total asset of the
firm after all the deductions are paid and dividends made. So
Owners' equity = Assets – Liabilities, but in this case,
Owners Equity = Contributed capital + Beginning retained earnings + profit – Dividends
=Contributed capital + Beginning retained earnings +(Total Revenue-Total Expense)-Dividends
= $900,000+$80,000+$800,000-$450,000-$65,000
= $1,265,000
Thus, the total shareholders’ equity is 1,265,000