The Stockholders\' Equity section of the balance sheet for High Five Design Comp
ID: 2421931 • Letter: T
Question
The Stockholders' Equity section of the balance sheet for High Five Design Company appeared as follows before its recent stock dividend:
Common stock, $3 par, 100,000 shares issued and outstanding
$300,000
Additional paid-in capital--common
150,000
Retained earnings
425,000
Total stockholders' equity
$875,000
High Five declared a 10% stock dividend when the market price per share was $7. In the space provided, write in the amounts of each of the components of the stockholders' equity section, after the stock dividend was distributed.
Common stock
$________________________
Additional paid-in capital -- Common stock
$________________________
Retained earnings
$________________________
Common stock, $3 par, 100,000 shares issued and outstanding
$300,000
Additional paid-in capital--common
150,000
Retained earnings
425,000
Total stockholders' equity
$875,000
Explanation / Answer
common stock = $30000 + $30000 (stock dividend)
= 330000
additional paid in capital = $150000 + $40000
= 190000
Retained earning = $425000 - $70000
= 355000
Note:-
10% stock dividend on 100000 shares =10000shares
total issued shares = 100000 + 10000
= 110000 shares
10000 shares as stock dividend issued at $7 (above $3 par value)
jounal entry
retained earning(10000* 7) Dr.$70000
To common stock(10000 * 3) $30000
To additional paid in capital(10000 *4) $40000
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