Question

Connect Homework: Chapter 11 A Required information (The following information applies to the questions displayed below.) Part 2 of 2 The stockholders' equity of TVX Company at the beginning of the day on February 5 follows. points Common stock-$10 par value, 150,000 shares authorized, 62,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 620,000 425,000 549,000 $1,594,000 eBook Hint On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $36 per share on February 5 before the stock dividend. Print 2. Prepare the stockholders' equity section after the stock dividend is distributed. (Assume no other changes to equity.) References TVX COMPANY Stockholders' Equity Section of the Balance Sheet February 28 Common stock Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity

Answer 1

Ans:

Stockholders’ equity Section of the Balance Sheet
February 28
Common stock	632400
Paid in capital in excess of par value, Common Stock	457,240
Retained earnings	504,360
Total stockholders’ equity	1,594,000
Workings:
Value of Stock Dividend	44,640	=62000*2%*36
Common stock	632400	=620,000+(62,000*2%*10)
Paid in capital in excess of par value, Common Stock	457,240	=425000+(62000*2%*26)
Retained earnings	504,360	=549000-44,640