The owners’ equity accounts for Alexander International are shown here:
Common stock ($.50 par value) ... $ 20,000
Capital surplus......... 285,000
Retained earnings6....... 38,120
Total owners’ equity..... $933,120
a. If Alexander stock currently sells for $30 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 Alexander declared a 25 percent stock dividend, how would the accounts change?