Answered

Welcome to Westonci.ca, where curiosity meets expertise. Ask any question and receive fast, accurate answers from our knowledgeable community. Ask your questions and receive precise answers from experienced professionals across different disciplines. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Boats and Bait has 78,000 shares outstanding that sell for a price of $74 per share. The stock has a par value of $2 per share. The company's balance sheet shows capital surplus of $185,000 and retained earnings of $225,000. If the company declares a stock dividend of 17.5 percent, what is the new common stock value on the balance sheet?

Sagot :

Answer:

$183,300

Explanation:

The computation is shown below:

Value of common stock value on the balance sheet prior to the stock dividend is

= No of stock outstanding ×  Face value per share

= 78,000 × $2

= $156,000

Now  

New shares to be issued is

= 78,000 ×  0.175

= 13,650 shares

So,  

Total shares outstanding after stock issue is

= 78,000 + 13,650

= 91,650 shares

Now the value of common stock after stock dividend is

= 91,650  × $2

= $183,300

We appreciate your time. Please revisit us for more reliable answers to any questions you may have. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for trusting Westonci.ca. Don't forget to revisit us for more accurate and insightful answers.