Question

The stockholders’ equity section of Flounder Corp.’s balance sheet consists of common stock ($9 par) $1,143,000 and retained earnings $400,000. A 10% stock dividend (12,700 shares) is declared when the market price per share is $15.

(a) Show the before-and-after effects of the dividend on the components of stockholders’ equity.

		Before Dividend		After Dividend
select an opening section name                                                          Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityPaid-in CapitalTotal Paid-in Capital
select an opening subsection name                                                          Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityPaid-in CapitalTotal Paid-in Capital
enter a balance sheet item		$enter a dollar amount		$enter a dollar amount
enter a balance sheet item		enter a dollar amount		enter a dollar amount
select a closing subsection name                                                          Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityPaid-in CapitalTotal Paid-in Capital		enter a subtotal of the two previous amounts		enter a subtotal of the two previous amounts
enter a balance sheet item		enter a dollar amount		enter a dollar amount
select a closing section name                                                          Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesNet Income / (Loss)Property, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' EquityPaid-in CapitalTotal Paid-in Capital		$enter a total amount for this section		$enter a total amount for this section

(b) Show the before-and-after effects of the dividend on the shares outstanding.

		Before Dividend		After Dividend
Outstanding shares		enter a dollar amount		enter a dollar amount

Answer 1

(a) Show the before-and-after effects of the dividend on the components of stockholders’ equity.

		Before Dividend		After Dividend
Stockholder's equity
Contributed capital
Common Stock		1143000		12700*9+1143000 = 1257300
Paid in capital in excess of par value-Common Stock				12700*6 = 76200
Total Contributed capital		1143000		1333500
Retained earnings		400000		400000-190500 = 209500
Total Stockholder's equity		1543000		1543000

(b) Show the before-and-after effects of the dividend on the shares outstanding.

		Before Dividend		After Dividend
Outstanding shares		127000		127000+12700 = 139700