Answered

IDNLearn.com provides a collaborative environment for finding and sharing knowledge. Ask any question and receive timely, accurate responses from our dedicated community of experts.

Boats and Bait has 78,000 shares outstanding that sell for a price of $74 per share. The stock has a par value of $2 per share. The company's balance sheet shows capital surplus of $185,000 and retained earnings of $225,000. If the company declares a stock dividend of 17.5 percent, what is the new common stock value on the balance sheet?

Sagot :

Answer:

$183,300

Explanation:

The computation is shown below:

Value of common stock value on the balance sheet prior to the stock dividend is

= No of stock outstanding ×  Face value per share

= 78,000 × $2

= $156,000

Now  

New shares to be issued is

= 78,000 ×  0.175

= 13,650 shares

So,  

Total shares outstanding after stock issue is

= 78,000 + 13,650

= 91,650 shares

Now the value of common stock after stock dividend is

= 91,650  × $2

= $183,300

We are happy to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. Your search for answers ends at IDNLearn.com. Thanks for visiting, and we look forward to helping you again soon.