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The company with the common equity accounts shown here has declared a 20 percent stock dividend...

The company with the common equity accounts shown here has declared a 20 percent stock dividend when the market value of its stock is $30 per share.
  Common stock ($1 par value) $ 400,000
  Capital surplus 849,000
  Retained earnings 3,750,800
     Total owners' equity $ 4,999,800

What would be the number of shares outstanding, after the distribution of the stock dividend? (Do not round intermediate calculations.)
  New shares outstanding   

What would the equity accounts be after the stock dividend? (Do not round intermediate calculations.)
  Common stock $   
  Capital surplus   
  Retained earnings   
     Total owners' equity $   
Business   Finance   
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Answer #1

Answer of Part a:

Before Stock Dividend:

No. of Stock Outstanding = Common Stock / Value per stock
No. of Stock Outstanding = $400,000 / $1
No. of Stock Outstanding = 400,000

No. of Stock Dividend = 400,000 * 20%
No. of Stock Dividend = 80,000

After Stock Dividend:

No. of Stock Outstanding = 400,000 + 80,000
No. of Stock Outstanding = 480,000

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