The current stockholders equity account for Hilo Farms is as follows: Common stock (50,000 shares at $3

Question:

The current stockholders’ equity account for Hilo Farms is as follows:

Common stock (50,000 shares at $3 par) ... $150,000

Paid-in capital in excess of par .................... 250,000

Retained earnings ......................................... 450,000

Total stockholders’ equity ........................... $850,000

Hilo has announced plans to issue an additional 5,000 shares of common stock as part of its stock dividend plan. The current market price of Hilo’s common stock is $20 per share. Show how the proposed stock dividend would affect the stockholder’s equity account.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...