On December 31, 2019, the shareholders' equity section of the balance sheet of R & L Corporation reflected the following:Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares)Contributed surplusRetained earnings$210,00011,60071,000On February 1, 2020, the board of directors declared a 8 percent stock dividend to be issued on April 30, 2020. The market value ofthe shares on February 1, 2020, was $16.00 per share.Required:1. For comparative purposes, prepare the shareholders' equity section of the balance sheet (a) immediately before the stock dividendand (b) immediately after the stock dividend. (Amounts to be deducted should be indicated with a minus sign.)Shareholders' EquityBeforeStockDividendAfterStockDividendAdjustmentContributed capital$ 210,00016,800 O s 226,800 8Common sharesContributed surplus11,60010,08021,680 OTotal contributed capital221,60026,880248,480Retained earnings71,000(26,880)44,120Total shareholders' equityS 292,600$ 292,600*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

Stockholders are the Persons of entities whom the company issues its ownership rights in the form of…

Answered: Common shares (no-par value; authorized…

Business

Accounting

Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 sha Contributed surplus Retained earnings

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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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

100%

On December 31, 2019, the shareholders' equity section of the balance sheet of R & L Corporation reflected the following:
Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares)
Contributed surplus
Retained earnings
$210,000
11,600
71,000
On February 1, 2020, the board of directors declared a 8 percent stock dividend to be issued on April 30, 2020. The market value of
the shares on February 1, 2020, was $16.00 per share.
Required:
1. For comparative purposes, prepare the shareholders' equity section of the balance sheet (a) immediately before the stock dividend
and (b) immediately after the stock dividend. (Amounts to be deducted should be indicated with a minus sign.)
Shareholders' Equity
Before
Stock
Dividend
After
Stock
Dividend
Adjustment
Contributed capital
$ 210,000
16,800 O s 226,800 8
Common shares
Contributed surplus
11,600
10,080
21,680 O
Total contributed capital
221,600
26,880
248,480
Retained earnings
71,000
(26,880)
44,120
Total shareholders' equity
S 292,600
$ 292,600
*Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

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