A summary of the transactions affecting the stockholders equity of Riverton Corporation during the current year follows.

Prior period adjustment (net of income tax benefit) $ (160,000 )

Issuance of common stock: 10,000 shares of $10 par value

capital stock at $68 per share 680,000

Declaration and distribution of 5% stock dividend (11,500 shares,

market price $40 per share) (460,000 )

Purchased 1,000 shares of treasury stock at $70 (70,000 )

Reissued 500 shares of treasury stock at a price of $72 per share 36,000

Net income 1,690,000

Cash dividends declared (285,400 )

Note: Parentheses ( ) indicate a reduction in stockholders' equity.

Required:

a. Prepare a statement of stockholders equity for the year. Use these column headings and beginning balances. (Notice that all additional paid-in capital accounts are combined into a single column.)

b-1. What was the overall effect on total stockholders equity of the 5 percent stock dividend of 11,500 shares?

b-2. What was the overall effect on total stockholders equity of the cash dividends declared?

b-3. Do these two events have the same impact on stockholders equity?