Question
Bonobos Balloons Inc. has four million shares in issue and outstanding. The par value per share is $10 and the market price per share is
Bonobos Balloons Inc. has four million shares in issue and outstanding. The par value per share is $10 and the market price per share is $30. The firm has a retained earnings balance of $30,000,000 and additional paid-in capital of $5,000,000. The board of directors has decided to do a 20% stock dividend.
Instructions
If the board of directors issues a 20% stock dividend, what will the effect on the common stock account, the par value per share, the retained earnings balance, and additional paid-in capital be after the dividend?
Computations:
Par value per share:
Common stock:
Retained earnings:
Additional paid-in capital:
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