The owners’ equity accounts for Octagon International are shown here: 

a. If the company’s stock currently sells for $39 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 the company declared a 25 percent stock dividend, how would the accounts change?

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Common stock ($1 par value) $ 25,000 Capital surplus Retained earnings Total owners' equity 135,000 487.600 $647,600