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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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