Question

On October 1, Little Bobby Corporation’s stockholders’ equity is as follows.
Common stock, $5 par value ............ $400,000
Paid-in capital in excess of par—common stock ... 25,000
Retained earnings ............... 155,000
Total stockholders’ equity ........... $580,000
On October 1, Little Bobby declares and distributes a 10% stock dividend when the market price of the stock is $15 per share.

Instructions
(a) Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
(b) Indicate the balances in the three stockholders’ equity accounts after the stock dividend shares have been distributed.



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  • CreatedJanuary 30, 2014
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