1. Stock Dividends.  The owners' equity account ts for Trans World International are shown here:

Common stock ($1 par value)                       $30,000

Capital surplus                                               185,000

Retained earnings                                          610,000

Total owners' equity                                    $825,000

a. If Trans World stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

b. If Trans World declared a 25 percent stock dividend, how would the accounts change?