2. Problem 17-2 Stock Dividends [LO3]

The owners equity accounts for Freya International are shown here:

Common stock ($.50 par value)	$	38,000
Capital surplus		330,000
Retained earnings		728,120
Total owners equity	$	1,096,120

a-1	If Freya stock currently sells for $20 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued

a-2	Show how the equity accounts would change. (Do not round intermediate calculations.)

Common stock	$
Capital surplus
Retained earnings
Total owners equity	$

b-1	If instead Freya declared a 20 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued

b-2	Show how the equity accounts would change. (Do not round intermediate calculations.)

Common stock	$
Capital surplus
Retained earnings
Total owners equity	$