Exercise 5 The equity section of Neely Corporation consists of share capitalordinary (10 par) 2,500,000 and retained earnings 500,000. A 10% share dividend (30,000 shares) is declared when the market price per share is 12. Show the before-and-after effects of the dividend on the following. (a) The components of equity. (b) Shares outstanding. (c) Par value per share.

Exercise 6 For the year ending December 31, 2018, Abbott Inc. reports net income $150,000 and dividends $55,000. Prepare the retained earnings statement for the year assuming the balance in retained earnings on January 1, 2018, was $225,000.