Question

Exercise 14-05 a-b (Part Level Submission) (Video) On October 1, Cullumber Corporation's stockholders' equity is as follows. Common stock, $5 par value Paid-in capital in excess of par-common stock Retained earnings $376,000 28,000 154,000 $558,000 Total stockholders' equity On October 1, Cullum ber declares and distributes a 10% stock dividend when the market price of the stock is $14 per share. ▼ (a) Your answer is incorrect. Try again Compute the par value per share (1) before the stock dividend and (2) after the stock dividend. Par value before the stock dividend 7.42 Par value after the stock dividend 6.75 LINK TO TEXT VIDEO: SIMILAR EXERCISE

Answer 1

Calculate the par value before and after the stock dividend as follows: A B D Amount of No. of Par Particulars common shares value stock 2 Par value before the stock dividend 75,200 S 5 $ 376,000 3 Par value after the stock dividend 82,720 $ 5 $ 413,600 Stock dividend is 10% of the common stock Show the spreadsheet formula as under: B C D Amount of Particulars No. of shares Par value common stock 2 Par value before the stock dividend =D2/C2 5 376000 3 Par value after the stock dividend =1.1*B2 =D3/B3 =1.1*D2 Stock dividend is 10% of the common stock