Beacon Corporation issued a 7 percent stock dividend on 25,500 shares of its $7 par common stock. At the time of the dividend, the market value of the stock was $27 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model.

Stock dividend

Req B:

Show the effects of the stock dividend on the financial statements using a horizontal statements model. (In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)

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BEACON CORPORATION

Horizontal Statements Model

Balance Sheet

Income Statement

Assets

=

Liabilities

+

Stockholders Equity

Revenue

Expense

=

Net Income

Statement of Cash Flow

Cash

=

+

Common Stock

+

PIC in Excess

+

Retained Earnings

=

=

+

+

+

=