On October 1, Kosko Corporation’s stockholders’ equity is as follows.

Common stock, $5 par value ........$400,000

Paid in capital in excess of par value ....... 25,000

Retained earnings .............. 155,000

Total stockholders equity .......... $580,000

On October 1, Kosko declares and distributes a 10% stock dividend when the market value 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.