The owners’ equity accounts for Freya International are shown here: Common stock ($.60 par value)$30,000 Capital surplus 310,000 Retained earnings 688,120 Total owners’ equity$1,028,120 a-1If Freya stock currently sells for $20 per share and a 20 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.) New shares issued a-2Show how the equity accounts would change. (Do not round intermediate calculations.) Common stock$ Capital surplus Retained earnings Total owners’ equity$ b-1If instead Freya declared a 25 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.) New shares issued b-2Show how the equity accounts would change. (Do not round intermediate calculations.) Common stock$ Capital surplus Retained earnings Total owners’ equity$ HintsReferenceseBook & ResourcesHint #1

Part a-1: Current selling price = $20 Stock dividend declared = 20% New shares issued = New Shares -…

Answered: The owners’ equity accounts for Freya…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 5P: Alert Companys shareholders equity prior to any of the following events is as follows: The company...

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The owners’ equity accounts for Freya International are shown here:


Common stock ($.60 par value)	$	30,000
Capital surplus		310,000
Retained earnings		688,120

Total owners’ equity	$	1,028,120

a-1	If Freya stock currently sells for $20 per share and a 20 percent stock dividend is declared, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued

a-2

Show how the equity accounts would change. (Do not round intermediate calculations.)


Common stock	$
Capital surplus
Retained earnings

Total owners’ equity	$

b-1	If instead Freya declared a 25 percent stock dividend, how many new shares will be distributed? (Do not round intermediate calculations.)

New shares issued

b-2

Show how the equity accounts would change. (Do not round intermediate calculations.)


Common stock	$
Capital surplus
Retained earnings

Total owners’ equity	$

Hints

References

eBook & Resources

Hint #1

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