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Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares) Contributed surplus Retained earnings 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.) Contributed capital Total contributed capital Shareholders' Equity Before Stock Dividend 0 After Adjustment Stock Dividend $210,000 11,600 71,000 0 0

Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares) Contributed surplus Retained earnings 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.) Contributed capital Total contributed capital Shareholders' Equity Before Stock Dividend 0 After Adjustment Stock Dividend $210,000 11,600 71,000 0 0

FINANCIAL ACCOUNTING
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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2. Which of the following statement(s) are true consequent upon the declaration of stock dividend? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Total assets will not change. ? Total liabilities will not change. 7 Total shareholders' equity will change. 7 Retained earnings will be reduced by the amount of dividend. ? Common stock and Additional paid-in capital will not change.
Transcribed Image Text:2. Which of the following statement(s) are true consequent upon the declaration of stock dividend? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Total assets will not change. ? Total liabilities will not change. 7 Total shareholders' equity will change. 7 Retained earnings will be reduced by the amount of dividend. ? Common stock and Additional paid-in capital will not change.
Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares) Contributed surplus Retained earnings 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.) Contributed capital Total contributed capital Total shareholders' equity Shareholders' Equity Before Stock Dividend $ 0 Adjustment 0 $ 0 0 After Stock Dividend $ $210,000 11,600 71,000 0 0
Transcribed Image Text:Common shares (no-par value; authorized 60,000 shares; outstanding 21,000 shares) Contributed surplus Retained earnings 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.) Contributed capital Total contributed capital Total shareholders' equity Shareholders' Equity Before Stock Dividend $ 0 Adjustment 0 $ 0 0 After Stock Dividend $ $210,000 11,600 71,000 0 0
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