Stakeholder Relevance – Equity & Dividends

Practice Question

Intro to Financial Accounting
Financial Statements and Business Decisions
Stakeholder Relevance
Short Answer

Golden Rule Inc. has reported a trial balance with total assets of $484,240 and total liabilities of $303,000. What is the total equity? Additionally, if the company pays a $1 per share dividend to 15,000 shares, what will be the total cash outflow for dividends?

Answer +
Final Answer: Total Equity = $181,240; Cash Outflow = $15,000
Explanation +

Step 1: Use the accounting equation:

Total Equity = Total Assets – Total Liabilities
Total Equity = $484,240 – $303,000 = $181,240

Step 2: Calculate dividend cash outflow:

Total Dividend = 15,000 shares × $1 per share = $15,000

Conclusion: Equity is $181,240 and total cash outflow for dividends is $15,000.