Wholegrain Health Foods Inc. is authorized to issue 5,000,000 common shares. In its initial public offering during 2010, Wholegrain issued 500,000 common shares for $7.00 per share. Over the next year, Wholegrain's share price increased and the company issued 400,000 more shares at an average price of $8.50.
During the five years from 2010 through 2014, Wholegrain earned net income of $920,000 and declared and paid cash dividends of $140,000. A 10% stock dividend was distributed to the shareholders in 2014 on the shares outstanding. The market price was $8.00 per share when the stock dividend was distributed. At December 31, 2014, the company has total assets of $14,500,000 and total liabilities of $6,820,000.
Requirement
Show the computation of Wholegrain's total shareholders' equity at December 31, 2014. Present a detailed computation of each element of shareholders' equity.