Q5. Required information The following information applies to the questions disp

Question

Q5.

Required information The following information applies to the questions displayed below.] The equity sections from Atticus Group's 2016 and 2017 year-end balance sheets follow. t 3 of 5 Stockholders' Equity (December 31, 2016) Common stock-$5 par value, 100,000 shares authorized, 40,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity 200,000 160,000 340,000 $ 700,000 ints Ask Stockholders' Equity (December 31, 2017) Common stock-$5 par value, 100,000 shares Print authorized, 47,400 shares issued, 3,000 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings (550,000 restricted by treasury stock) $237,000 211,800 420,699 868,800 (50,000) $818, 880 References Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during year 2017 an. 5 Declared a $e.50 per share cash dividend, date of record January 10. Mar. 20 Purchased treasury stock for cash Apr. 5 Declared a $8.50 per share cash dividend, date of record April 10. July 5 Declared a $0.50 per share cash dividend, date of record July 10. July 31 Qeclared a 20% stock dividend when the stock's market value was $12 per share. Aug. 14 Issued the stock dividend that was declared on July 31. Oct. 5 Dec lared a $e.50 per share cash dividend, date of record October 10.

Explanation / Answer

3) Amount of the capitalization of retained earnings = (40000-3000)*20%*12 = 88800

so Capitalization amount is 88800

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