The owners’ equity accounts for Vulcano International are shown below. a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. b. If the company declared a 25 percent stock dividend, how would the accounts change? Input Area: Common stock $20,000 Par value $0.50 Capital surplus $210,000 Retained earnings $587,300 Total owners' equity $817,300 Stock price $42 Stock dividend 10% Stock dividend 25% (Use cells A6 to B13 from the given information to complete this question.) Output Area: New shares outstanding New shares issued - Capital surplus on new shares Common stock Capital surplus Retained earnings Total owners' equity
The owners’ equity accounts for Vulcano International are shown below. a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. b. If the company declared a 25 percent stock dividend, how would the accounts change? Input Area: Common stock $20,000 Par value $0.50 Capital surplus $210,000 Retained earnings $587,300 Total owners' equity $817,300 Stock price $42 Stock dividend 10% Stock dividend 25% (Use cells A6 to B13 from the given information to complete this question.) Output Area: New shares outstanding New shares issued - Capital surplus on new shares Common stock Capital surplus Retained earnings Total owners' equity
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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| The owners’ equity accounts for Vulcano International are shown below. a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. b. If the company declared a 25 percent stock dividend, how would the accounts change? |
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| Input Area: | ||||
| Common stock | $20,000 | |||
| Par value | $0.50 | |||
| Capital surplus | $210,000 | |||
| $587,300 | ||||
| Total owners' equity | $817,300 | |||
| Stock price | $42 | |||
| Stock dividend | 10% | |||
| Stock dividend | 25% | |||
| (Use cells A6 to B13 from the given information to complete this question.) | ||||
| Output Area: | ||||
| New shares outstanding | ||||
| New shares issued | - | |||
| Capital surplus on new shares | ||||
| Common stock | ||||
| Capital surplus | ||||
| Retained earnings | ||||
| Total owners' equity | ||||
| New shares outstanding | ||||
| New shares issued | ||||
| Capital surplus on new shares | ||||
| Common stock | ||||
| Capital surplus | ||||
| Retained earnings | ||||
| total owners' equity |
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