January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event, A. Edison's Paid-in Capital in Excess of Par account increased $1,600,000. B. Edison's total stockholders' equity was unaffected. C. Edison's Stock Dividends account increased $3,600,000. D. All of these answers are correct.

Question

Braylon Farley

Business

5 February, 14:22

January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event, A. Edison's Paid-in Capital in Excess of Par account increased $1,600,000. B. Edison's total stockholders' equity was unaffected. C. Edison's Stock Dividends account increased $3,600,000. D. All of these answers are correct.

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Braedon Bradley · Answer 1

D All of these answers are correct.

Explanation:

Given that the corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event

Paid-in Capital in Excess of Par = 1000000*20% * (18-10) = 1600000

Stock dividend = 1000000*20%*18 = 3600000

Edison's total stockholders' equity was unaffected because increase in Stock dividend leads to decrease in retained earnings by the same amount.

Answer is option D All of these answers are correct.