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Question: The owners’ equity accounts for Vulcano


The owners’ equity accounts for Vulcano International are shown here:

Common stock ($.50 par value) …………….. $ 20,000
Capital surplus …………………………………….. 210,000
Retained earnings ………………………………… 587,300
Total owners’ equity …………………………… $ 817,300

a. If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If the company declared a 25 percent stock dividend, how would the accounts change?


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