$2.($chapter $19)$ Stock Dividends

The shareholders$$ equity accounts for Hexagon International are shown here:

Common stock $($$$1$ book

value$)40,000$

Capital surplus $335,000$

Retained earnings $738,120$

Total shareholders$$ equity $1,113,120$

a$-1.$ If Hexagon stock currently sells for $$25$ per share and a $10$ percent stock dividend is declared,

how many new shares will be distributed?

a$-2.$ Show the new equity account balances after the stock dividend is paid.

b$-1.$ If Hexagon declared a $25$ percent stock dividend, how many new shares will be distributed?

b$-2.$ Show the new equity account balances after the stock dividend is paid.