Explain how to calculate the after stock dividend to enter on the Balance Sheet. At the beginning of the year, the stockholders' equity section of the balance sheet of Solutions Corporation reflected the following:         Common stock ($12 par value; 65,000 shares authorized, 30,000 shares outstanding) $ 360,000   Additional paid-in capital   120,000   Retained earnings   580,000       On February 1, the board of directors declared a 60 percent stock dividend to be issued April 30. The market value of the stock on February 1 was $15 per share. The market value of the stock on April 30 was $18 per share.   Required: 1. For comparative purposes, prepare the Stockholders’ Equity section of the balance sheet immediately before the stock dividend and immediately after the stock dividend.

Question

Explain how to calculate the after stock dividend to enter on the Balance Sheet.

At the beginning of the year, the stockholders' equity section of the balance sheet of Solutions Corporation reflected the following:

       
Common stock ($12 par value; 65,000 shares authorized, 30,000 shares outstanding) $ 360,000  
Additional paid-in capital   120,000  
Retained earnings   580,000  
 

 

On February 1, the board of directors declared a 60 percent stock dividend to be issued April 30. The market value of the stock on February 1 was $15 per share. The market value of the stock on April 30 was $18 per share.

 

Required:

1. For comparative purposes, prepare the Stockholders’ Equity section of the balance sheet immediately before the stock dividend and immediately after the stock dividend.

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