The owners equity accounts for Masterson International are shown here: Common stock ($1 par value) .......$ 45,000

Question:

The owners’ equity accounts for Masterson International are shown here:
Common stock ($1 par value) .......$ 45,000
Capital surplus ..................................157,000
Retained earnings ......................603,000
Total owners’ equity .......................$805,000

a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If the company declared a 25 percent stock dividend, how would the accounts change?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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