Gilligan Corporation was established on February 15, Year 1. Giligan is authoriz

Question

Gilligan Corporation was established on February 15, Year 1. Giligan is authorized to issue 500,000 shares of $6.00 par value common stock. As of December 30, Year 1, Gilligan's stockholders' equity accounts report the following balances: Common stock, $6 par, 500,000 shares authorized 55,000 shares issued and outstanding Paid-in capital in excess of par Common Retained earnings Total Stockholders Equity On December 31, Year 1, Gilligan decides to issue a 5% stock dividend. At the time of issue, the market price of the stock was $22 per share. What is the dollar value of the stock dividend issued by Gilligan Corporation?

Explanation / Answer

Calculate dollar value of stock dividend :

Share issued and outstanding = 55000 shares

Stock dividend rate = (55000*5%) = 2750 shares

Market price per share = 22

stock dividend dollar amount = (2750*22) = $60500

so answer is a) $60500

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