Samson Corporation\'s common stock is priced at $30.50 per share before any stoc

Question

Samson Corporation's common stock is priced at $30.50 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows.

Common stock—$8 par value, 80,000 shares authorized, 32,000 shares issued and outstanding $ 256,000
Paid-in capital in excess of par value, common stock 100,000
Retained earnings 356,000

Total stockholders' equity $ 712,000

--------------------------------------------------------------------------------
The company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares.

How many shares are outstanding after the dividend?

Explanation / Answer

100% stock divident = number of shares issued and outstanding at par=32000sh*$8=25600 Number of shares issued and outstanding will double 32000*2=64000. It large stoch dividend and it similar to stock split 1to2. Declaration of 100% divident Retained Earning 64000 Common stock div distrib 64000 Distribution Common stock div distrib 64000 Common stock 64000

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.