Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at $34 per share. The following is Oriole's current shareholders' equity: Common stock, $10 par $300,000 Additional paid-in capital on common stock 600,000 Total contributed capital $900,000 Retained earnings 1,300,000 Total shareholders' equity $2,200,000 Required: 1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance. Oriole Company Stockholders' Equity Common stock, $10 par $fill in the blank Additional paid-in capital on common stock fill in the blank Total contributed capital $fill in the blank Retained earnings fill in the blank Total shareholders' equity $fill in the blank 2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance. Oriole Company Shareholders' Equity Common stock, $10 par $fill in the blank Additional paid-in capital on common stock fill in the blank Total contributed capital $fill in the blank Retained earnings fill in the blank Total shareholders' equity $fill in the blank

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at $34 per share. The following is Oriole's current shareholders' equity:

Common stock, $10 par	$300,000
Additional paid-in capital on common stock	600,000
Total contributed capital	$900,000
Retained earnings	1,300,000
Total shareholders' equity	$2,200,000

Required:

1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.

Oriole Company
Stockholders' Equity

Common stock, $10 par	$fill in the blank
Additional paid-in capital on common stock	fill in the blank
Total contributed capital	$fill in the blank
Retained earnings	fill in the blank
Total shareholders' equity	$fill in the blank

2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.

Oriole Company
Shareholders' Equity

Common stock, $10 par	$fill in the blank
Additional paid-in capital on common stock	fill in the blank
Total contributed capital	$fill in the blank
Retained earnings	fill in the blank
Total shareholders' equity	$fill in the blank

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