Bridge Corporation issued a 15% stock dividend on 20,000 outstanding shares of $
ID: 2501535 • Letter: B
Question
Bridge Corporation issued a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution was made at the time the market value of the stock was $50 a share. How did this transaction affect the company's total stockholders' equity?
The total balances in equity accounts increased by $150,000.
The sum of the balances in equity accounts increased by $30,000.
The sum of the balances in equity accounts decreased by $150,000.
Total stockholders' equity was not affected by this transaction.
Explanation / Answer
Issue of stock dividends does not affect the total stockholders' equity. Therefore, the total stockholders' equity was not affected by this transaction.