Computation of number of shares, stock dividend, value of stock dividend
Number of shares = 500000+400000 = 900000
Stock dividend = 10%*900000 = 90000 shares
Value of stock dividend = 90000*8 = 72000
Computation of big auto part’s total shareholder’s equity December 31, 2019
Particulars |
amount |
Common stock capital |
|
500000 shares at $7 each |
3500000 |
400000 share at $8.5 each |
3400000 |
Add: stock dividend 90000 shares at $8 each |
720000 |
A = |
7620000 |
big auto part inc retained earnings |
|
Net income |
920000 |
Less: cash dividend |
140000 |
780000 |
|
Less: stock dividend (90000 shares@ $8 each) |
720000 |
B = |
60000 |
Big auto part’s total shareholder’s equity December 31, 2019 = (A+B)
= 7620000+60000 = 7680000
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