Kitty Hawk Airlines recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity

Question:

Kitty Hawk Airlines recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity section on Kitty Hawk’s balance sheet was:

Common stock (12,000 shares outstanding, $2 par value) ………..……...…. $24,000

Additional paid-in capital ……………………………………………………………………… 16,000

Retained earnings ………………………………………………………………………………… 10,000

Total common shareholders’ equity ……………………………………………….…… $50,000

Kitty Hawk’s stock currently sells for $5 per share. Show what the equity section of the balance sheet will look like after the stock dividend is initiated.

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... 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...

Fantastic news! We've Found the answer you've been seeking!