Question

The owners’ equity accounts for Freya International are shown here: Common stock ($.40 par value) $ 20,000 Capital surplus 290,000 Retained earnings 648,120 Total owners’ equity $ 958,120

a-1 If Freya stock currently sells for $20 per share and a 15 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued:

a-2 Show how the equity accounts would change. (Do not round intermediate calculations.)

Common stock: $

Capital surplus:

Retained earnings:

Total owners’ equity: $

b-1 If instead Freya declared a 20 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued:

b-2 Show how the equity accounts would change. (Do not round intermediate calculations.)

Common stock: $

Capital surplus:

Retained earnings:

Total owners’ equity: $

Answer 1