The company with the common equity accounts shown here has declared a 15 percent

Question

The company with the common equity accounts shown here has declared a 15 percent stock dividend when the market value of its stock is $31 per share.

The company with the common equity accounts shown here has declared a 15 percent stock dividend when the market value of its stock is $31 per share. Common stock ($1 par value) Capital surplus 465,000 862,000 3,880,800 Retained earnings Total owners' equity $ 5.207,800 What would be the number of shares outstanding, after the distribution of the stock dividend? New shares outstanding What would the equity accounts be after the stock dividend? Common stock Capital surplus Retained earnings Total owners' equity

Explanation / Answer

At the time of declaration

At the time of issuance of stock

Number of shares outstanding after distribution of stock dividend

465000+(465000*1*15%)

=465000+69750

=534750

Pariculars Debit Credit Retained Earnings 2162250 Stock Dividend Distributable (465000*31*15%) 2162250

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