At the beginning of the year, the stockholders\' equity section of the balance s

Question

At the beginning of the year, the stockholders' equity section of the balance sheet of Solutions Corporation reflected the following Common stock (515 par value; 67,000 shares authorized, 36,000 shares outstanding) Additional paid-in capital Retained earnings 540,000 133,000 752,000 On February 1, the board of directors declared a 60 percent stock dividend to be issued April 30. The market value of the stock on February 1 was $18 per share. The market value of the stock on April 30 was $18 per share Required 1. For comparative purposes, prepare the stockholders' equity section of the balance sheet (a) immediately before the stock dividend and (b) immediately after the stock dividend SOLUTIONS CORPORATION Balance Sheet (Partial) At February 1, This Year Stockholders' Equity Before Stock Dividend After Stock Dividend Contributed Capital: Common stock Additional paid-in capital Retained earnings Total stockholders' equity Reterences eBook & Resources Difmiculty: 2 Medium Learning Objective: 11-06 DiscUSs and report stock dividends and stock splits.

Explanation / Answer

Prepare stockholder's equity section :

stock dividend = (36000*60%*15) = 324000

Before stock dividend After stock dividend contributed capital Common stock 540000 864000 Additional paid in capital 133000 133000 Retained earnings 752000 428000 Total stockholder's equity 1425000 1425000

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