Val's Marina Supply has 3,500 shares of stock outstanding with a par value of $1.00 per share and a market value of $19 per share. The balance sheet shows $3,500 in the common stock account, $24,000 in the capital in excess of par account, and $31,400 in the retained earnings account. The firm just announced a 100 percent stock dividend. What is the value of the capital in excess of par account after the dividend?
The capital in excess of par account will remain at $24,000 as it does not change with a large stock dividend.
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69.
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Kurt's Market has 8,000 shares of stock outstanding with a par value of $1 per share and a market value of $13 per share. The balance sheet shows $8,000 in the common stock account, $26,000 in the capital in excess of par account, and $36,800 in the retained earnings account. The firm just announced a 100 percent stock dividend. What will be the balance in the retained earnings account after this dividend?
Retained earnings = $36,800 - [(8,000 shares × 1.0) × $1] = $28,800
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70.
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The Tanning Bed has 10,000 shares of stock outstanding with a par value of $1 per share and a market value of $8 per share. The balance sheet shows $10,000 in the common stock account, $60,000 in the capital in excess of par account, and $94,300 in the retained earnings account. The firm just announced a 100 percent stock dividend. What will be the value of the common stock account after the dividend?
Common stock = [(10,000 shares × 1.0) × $1] + $10,000 = $20,000
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