Question-based on, "equity accounts". Need to do Part B. I have tried it but got it incorrect. On October 1, Oriole Corporation's stockholders' equity is as follows.Common stock, $7 par value$535,500Paid-in capital in excess of par-common stock30,000Retained earnings167,000Total stockholders' equity$732,500On October 1, Oriole declares and distributes a 10% stock dividend when the market price of the stock is $14 per share. (a)Your answer is correct.Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.Par value before the stock dividend2$7Par value after the stock dividend2$7.eTextbook and MediaAttempts: 2 of 3 used(b)Indicate the balances in the three stockholders' equity accounts after the stock dividend shares have been distributed.Common stockPaid-in capital in excess of par value$Retained earnings%24%24

Answered: (b) Indicate the balances in the three…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 5MCQ

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Question-based on, "equity accounts".

Need to do Part B.

I have tried it but got it incorrect.

On October 1, Oriole Corporation's stockholders' equity is as follows.
Common stock, $7 par value
$535,500
Paid-in capital in excess of par-common stock
30,000
Retained earnings
167,000
Total stockholders' equity
$732,500
On October 1, Oriole declares and distributes a 10% stock dividend when the market price of the stock is $14 per share.

(a)
Your answer is correct.
Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.
Par value before the stock dividend
2$
7
Par value after the stock dividend
2$
7.
eTextbook and Media
Attempts: 2 of 3 used
(b)
Indicate the balances in the three stockholders' equity accounts after the stock dividend shares have been distributed.
Common stock
Paid-in capital in excess of par value
$
Retained earnings
%24
%24

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Solution:

Introduction:

Common stock are the ordinary shares which are issued by a company to shareholders for raising long term capital investment purposes. Hence it has normal credit balance. Additional paid in capital means the amount paid above the par value of the company.

Par value is simply the Face value of the company which is stated in the charter.

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