Question #2

2 Stock Dividends The owners equity accounts for Southern Lights International are shown here: Common stock ($1 par value) Capital surplus Retained earnings Total owners' equity $ 22,000 95.000 632,800 $749,800 a. If the company's stock currently sells for $33 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. b. If the company declared a 25 percent stock dividend, how would the accounts change? 3. Stock Splits For the company in Problem 2, show how the equity accounts will change if: a. The company declares a 4-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for-5 reverse stock split. How many shares are outstanding now? What is the new par value per share? arr nnn charge of stock