Question

The stockholders’ equity section of Jun Company’s balance sheet as of April 1 follows. On April 2, Jun declares and distributes a 15% stock dividend. The stock’s per share market value on April 2 is $10 (prior to the dividend).

Common stock—$5 par value, 465,000 shares
authorized, 245,000 shares issued and outstanding	$	1,225,000
Paid-in capital in excess of par value, common stock		580,000
Retained earnings		878,000
Total stockholders' equity	$	2,683,000

Answer 1

Jun Company

Stockholders' Equity

April 2 (after stock dividend)

Common stock	$1,408,750
Paid-in capital in excess of par value, common stock	$763,750
Total paid-in capital	$2,172,500
Retained earnings	$510,500
Total stockholders' equity	$2,683,000