1.
SHARPER CORPORATION | |
Stockholders'Equity Section of the Balance Sheet | |
June 30 | |
Common stock - $10 par value, 75,000 shares issued and outstanding | 750,000 |
Paid in capital in excess of par value, common stock | 200,000 |
Retained earnings | 410,000 |
Total stockholders'equity | $1,360,000 |
2.
Number of shares outstanding before stock dividend = 50,000
Stock dividend = 50%
Number of shared issued in stock dividend = 50,000 x 50%
= 25,000
Number of shares outstanding after stock dividend = Number of shares outstanding before stock dividend - Number of shared issued in stock dividend
= 50,000+25,000
= 75,000
Number of common shares outstanding |
25,000 |
Working notes:
In case of large stock dividends par value of shares is considered for stock dividends.
retained earnings will be debited by = Number of shared issued in stock dividend x 10
= 25,000 x 10
= $250,000
Common stock will become after stock dividend = 500,000+250,000
= $750,000
Retained earnings (after stock dividend) = 660,000-250,000
= $410,000
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