Ask Question
9 October, 18:47

The stockholders' equity section of Pretzer Corporation consists of common stock ($10 par) $2,650,000 and retained earnings $532,000. A 10% stock dividend (26,500 shares) is declared when the market price per share is $14. Show the before-and-after effects of the dividend on the following.

(a) The components of stockholders' equity. (b) Shares outstanding. (c) Par value per share.

+2
Answers (1)
  1. 9 October, 22:27
    0
    A. $2,650,000 $3,312,500

    B.$532,000 $291,500

    C.$10 $10

    Explanation:

    Before Dividend After Dividend

    (a) Stockholders' equity

    Paid-in capital

    Common stock, $10 par

    $2,650,000 $2,915,000

    In excess of par value $106,000

    Total paid-in capital

    $2,650,000 $3,021,000

    Retained earnings

    $532,000 $291,500

    Total stockholders' equity

    $3,182,000 $3,312,500

    (b) Outstanding shares

    $265,000 $291,500

    (c) Par value per share

    $10 $10

    10*$26,500=$265,000

    $2,650,000+$265,000=$2,915,000

    $14*$26,500=$371,000-265,000

    =$106,000

    $265,000+$26,500=$291,500
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The stockholders' equity section of Pretzer Corporation consists of common stock ($10 par) $2,650,000 and retained earnings $532,000. A 10% ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers