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Problem 10-05

Jackson Enterprises has the following capital (equity) accounts:

Common stock ($1 par; 100,000 shares outstanding)	$	100,000
Additional paid-in capital		-50,000
Retained earnings		250,000

The board of directors has declared a 20 percent stock dividend on January 1 and a $0.20 cash dividend on March 1. What changes occur in the capital accounts after each transaction if the price of the stock is $3? Round the number of shares outstanding to the nearest whole number and the other answers to the nearest dollar.

The impact of the 20 percent stock dividend:

Common stock ($ par; shares outstanding)		$
Additional paid-in capital		$
Retained earnings		$

The impact of the $0.20 a share cash dividend:

Common stock ($ par; shares outstanding)		$
Additional paid-in capital		$
Retained earnings		$