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Item 5

The owners equity accounts for Southern Lights International are shown here:

Common stock ($.40 par value)	$	27,500
Capital surplus		375,000
Retained earnings		818,120
Total owners equity	$	1,220,620

a-1. If the company's stock currently sells for $40 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.) New shares issued ___________? a-2. Show the new equity account values. (Do not round intermediate calculations.)

Common stock	$
Capital surplus
Retained earnings
Total owners equity	$

b-1. If instead the company declared a 20 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.) New shares issued __________? b-2. Show the new equity account values. (Do not round intermediate calculations.)

Common stock	$
Capital surplus
Retained earnings
Total owners equity	$