Prior period adjustment $($net of income tax benefit$).....................$ $ $(160,000)$

Issuance of common stock: $10,000$ shares of $$10$ par value

capital stock at $$68$ per share $....................................680,000$

Declaration and distribution of $5\%$ stock dividend $(11,500$ shares,

market price $$40$ per share$)......................................(460,000)$

Purchased $1,000$ shares of treasury stock at $$70.......................(70,000)$

Reissued $500$ shares of treasury stock at a price of $$72$ per share $.........36,000$

Net income $....................................................1,690,000$

Cash dividends declared $..........................................(285,400)$

Note: Parentheses $()$ indicate a reduction in stockholders$$ equity.

Instructions

a$.$ Prepare a statement of stockholders$$ equity for the year. Use these column headings and beginning balances. $($Notice that all additional paid$-$in capital accounts are combined into a single

column.$)$

b$.$ What was the overall effect on total stockholders$$ equity of the $5$ percent stock dividend of

$11,500$ shares? What was the overall effect on total stockholders$$ equity of the cash dividends declared? Do these two events have the same impact on stockholders$$ equity? Why or

why not?

Instructions

Compute the amount of total stockholders$$ equity, the number of shares of capital stock outstanding, and the book value per share following each successive transaction. Organize your solution

as a three$-$column schedule with these separate column headings: $(1)$ Total Stockholders$$ Equity,

$(2)$ Number of Shares Outstanding, and $(3)$ Book Value per Share.

A summary of the transactions affecting the stockholders$$ equity of Riverton Corporation during

the current year follows:

LO$12-4,$ LO$12-8$

PROBLEM $12\mathrm{.}5$A

Preparing a Statement of

Stockholders$$ Equity

Capital Stock

$($$$10$ par value$)$

Additional

Paid$-$in

Capital

Retained

Earnings

Treasury

Stock

Total

Stock$-$holders$$

Equity

Balances,

Jan. $1$ $$2,200,000$ $$3,530,000$ $$1,900,000$ $ $0$ $$7,630,000$