Kitty Hawk Airlines recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity section on Kitty Hawk’s balance sheet was:

Kitty Hawk’s stock currently sells for $5 per share. Show what the equity section of the balance sheet will look like after the stock dividend is initiated.

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Common stock (12,000 shares outstanding, $2 par value) $24,000 Additional paid-in capital Retained earnings Total common shareholders' equity 16,000 10,000 $50,000