Question

The company with the common equity accounts shown here has declared a stock dividend of 10 percent at a time when the market value of its stock is $34 per share.

Common stock ($1 par value)	$	420,000
Capital surplus		853,000
Retained earnings		3,790,800
Total owners' equity	$	5,063,800

What would be the number of shares outstanding, after the distribution of the stock dividend? (Do not round intermediate calculations.)

New shares outstanding            

What would the equity accounts be after the stock dividend? (Do not round intermediate calculations.)

Common stock	$
Capital surplus
Retained earnings
Total owners' equity	$

Answer 1

Shares outstanding before stock dividend = 420000/1 420000 Shares Equity Section Before Stock Dividend Common Stcok $1 Par Value 420000*1 Capital Surplus Retained Earnings Total $ $ $ $ 420,000 853,000 3,790,800 5,063,800 10 %Stock Dividend 420000*0.1 42000 Shares Equity Section After Stock Dividend Common Stcok $0.4 Par Value 420000+42000*1 Capital Surplus 853000+42000*(34-1) Retained Earnings 3790800-42000*34 Total 462000 2239000 2362800 5,063,800 $