Question
Stock Dividend Comparison Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is
Stock Dividend Comparison
Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at $34 per share. The following is Oriole's current shareholders' equity:
Common stock, $10 par | $400,000 |
Additional paid-in capital on common stock | 800,000 |
Total contributed capital | $1,200,000 |
Retained earnings | 1,300,000 |
Total shareholders equity | $2,500,000 |
Required:
1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.
Oriole Company | |
Stockholders' Equity | |
Common stock, $10 par | $ |
Additional paid-in capital on common stock | |
Total contributed capital | $ |
Retained earnings | |
Total shareholders' equity | $ |
2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.
Oriole Company | |
Shareholders' Equity | |
Common stock, $10 par | $ |
Additional paid-in capital on common stock | |
Total contributed capital | $ |
Retained earnings | |
Total shareholders' equity | $ |
There should be ten answers. Where the $ is in an answer space and the two blanks in between them.
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