On December 31, 2007. the Stockholders' Equit) section of the balance sheet of R A R Corporation reflected the following:

On February 1 , 2008, the board of directors declared a 1 2 percent stock dividend to be issued April 30, 2008. The market value of the stock on February 1, 2008, was $18 per share.
Required: 1. For comparative purposes, prepare the Stockholders' Equity section of the balance sheet

(a) immediately before the stock dividend and

(b) immediately after the stock dividend. (Hint: Use two amount columns for this requirement.) 2. Explain the effects of this stock dividend on the assets, liabilities, and stockholders' equity.

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Common stock (par $10; authorized 60,000 shares. outstanding 25,000 shares) Capital in excess of par Retained earnings $250,000 12,000 75,000