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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do not give answer in image
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.
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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