Sanella Corporation reported the following equity section on its current balance sheet

Question

The common stock is currently selling for $18.25 per share.

Common Stock, $14 Par, 129,000 shares authorized,48,000 shares issued and outstanding $672,000
Paid-in Capital in Excess of Par-Common 167,000
Retained Earnings 350,000
Total Stockholders' Equity $1,189,000

What would be the balance in the Common Stock account after the issuance of a 10% stock dividend?
A) $334,000
B) $604,800
C) $739,200
D) $672,000

Answer 1

C .C)
Par value $14
DPS $1.4
No. of common stock x 48,000
Dividend paid to the common stockholders $67,200
Common stock, $14 par, 129,000 shares authorized,
48,000 shares issued $672,000
Balance in the Common Stock account $739,200
$672,000 + (48,000 x $14 x 10%) = $739,200