On December 31, 2013, the shareholders' equity section of the balance sheet of R & L Corporation

Question:

On December 31, 2013, the shareholders' equity section of the of R & L reflected the following:

Common shares (no par value; authorized 60,000 shares; outstanding 25,000 shares) Contributed surplus $250,000 12,000 Re

On February 1, 2014, the board of directors declared a 12 percent stock dividend to be issued April 30, 2014. The market value of the shares on February 1, 2014, was $18 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.
Use two columns for the amounts in this requirement.
2. Explain the effects of this stock dividend on the assets, liabilities, and the components of shareholders' equity.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...