Problem 14-4 Stock Dividends [LO 3]

The owners equity accounts for Masterson International are shown here:

Common stock ($1 par value)		$	50,000
Capital surplus			191,000
Retained earnings			630,000
Total owners equity		$	871,000

a. Assume the company's stock currently sells for $44 per share and a stock dividend of 20 percent is declared.

How many new shares will be distributed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Show the new balance for each equity account. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

b. Now assume that instead the company declares a stock dividend of 26 percent.

How many new shares will be distributed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Show the new balance for each equity account. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)