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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

An owner of 300 shares of Colorado Spring Company common stock recives a stock dividend of 6 shares.

a. What is the effect of the stock dividend on the stockholder’s proporhon3te interest (equity) in the corporation?
b. how does the total equity of 306 shares compare with the total equity of 300 shares before the stock dividend?

To determine

Concept Introduction:

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

Requirement-a:

To Indicate:

The effect of the Stock Dividend on the Stockholder's equity

Explanation

The Stock Dividend does not affec...

To determine

Concept Introduction:

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

Requirement-b:

To Indicate:

The effect of the Stock Dividend on the Stockholder's equity

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