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?

Question

Blake Bradford

Business

15 December, 18:48

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?

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Brylee Blair · Answer 1

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

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.