The owners equity accounts for Hexagon International are shown here: Common stock ($1 par value) ....... $

Question:

The owners’ equity accounts for Hexagon International are shown here:
Common stock ($1 par value) ....... $ 30,000
Capital surplus .............. 185,000
Retained earnings ............ 627,500
Total owners’ equity ........... $842,500

a. If Hexagon stock currently sells for $37 per share and a 10 percent stock is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If Hexagon declared a 25 percent stock how would the accounts change?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...