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: