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The owners equity accounts for Trans World International are shown here: Common stock ($1 par value) $ 45,000 Capital surplus 125,000 Retained earnings 580,000 Total
| The owners equity accounts for Trans World International are shown here: |
| Common stock ($1 par value) | $ | 45,000 | ||
| Capital surplus | 125,000 | |||
| Retained earnings | 580,000 | |||
| Total owners equity | $ | 750,000 | ||
| Requirement 1: | |
| Assume Trans World stock currently sells for $42 per share and a stock dividend of 10 percent is declared. |
| (a) | How many new shares will be distributed? |
| New shares issued |
| (b) | Show the new balance for each equity account. |
| Common stock | $ | |||
| Capital surplus | ||||
| Retained earnings | ||||
| Total owners equity | $ | |||
| Requirement 2: | |
| Now assume that instead Trans World declares a stock dividend of 25 percent. |
| (a) | How many new shares will be distributed? |
| New shares issued |
| (b) | Show the new balance for each equity account. |
| Common stock | $ | |||
| Capital surplus | ||||
| Retained earnings | ||||
| Total owners equity | $ | |||
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