The stockholders’ equity section of Pretzer Corporation consists of common stock

Question

The stockholders’ equity section of Pretzer Corporation consists of common stock ($10 par) $1,850,000 and retained earnings $516,000. A 10% stock dividend (18,500 shares) is declared when the market price per share is $15. Show the before-and-after effects of the dividend on the following.

a) The components of stockholders’ equity. (b) Shares outstanding. (c) Par value per share. Brief Exercise 14-4 The stockholders' equity section of Pretzer Corporation consists of common stock ($10 par) $1,850,000 and retained earnings $516,000. A 10% stock dividend (18,500 shares) is declared when the market price per share is $15. Show the before-and-after effects of the dividend on the following. the before-and-after effects of the dividend on the (a) (b) (c) The components of stockholders' equity. Shares outstanding. Par value per share. Before Dividend After Dividend Stockholders' equitys Outstanding shares Par value per share

Explanation / Answer

Before Dividend After Dividend

a) Stockholder equity :

Common stock $1850000 (1850000+185000)=$2035000

Retained earning $516000 (516000-277500)= $238500

Note:- Retained earning(18500*$15) Dr.$277500

   To Common stock(18500* $10) $185000

   To additional paid up capital(18500 * $5) $92500

b) Outstanding shares 185000 shares 203500 shares

  Note:- Common stock after dividend =185000 + 18500

   =203500

c Par value per shares $10 10

Note:-   After issuing stock dividend , Par Value of share doesn't change , its happens in splitting up of shares

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

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