Question

On June​ 30, 2018,​ Samuel, Inc. showed the following data on the equity section of their balance​ sheet: Stockholders' Equity Common​ Stock, $1.00 ​par; 205,000 shares​ authorized, 148,000 shares issued and outstanding $148,000 Paid−In Capital in Excess of Par—Common $264,000 Retained Earnings 952,000 Total​ Stockholder's Equity $1,364,000 On July​ 1, 2018, the company declared and distributed a 8​% stock dividend. The market value of the stock at that time was $14 per share. Following this​ transaction, what is total​ stockholders' equity?

Answer 1

The Total Stockholders equity will remain same as $1,364,000

Step-by-step explanation:

To calculate the total​ stockholders' equity we would have to make the following calculations:

Stock dividend shares = 148,000 * 8% = 11,840 shares

Value of Stock dividend = 11,840 * $14 = $165,760

Increase in Common stock due to stock Dividend = 11,840 * 1 = $11,840

Increase in paid in capital in excess of par = $11,840 * ($14-$1) = $153,920

Decrease in retained earnings = $165,760

Hence net change in Stockholders Equity = $11,840 + $153,920 - $165,760 = $0

Therefore, Total Stockholders equity will remain same as $1,364,000.

The Total Stockholders equity will remain same as $1,364,000.