Stock Dividend Comparison
Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at $34 per share. The following is Oriole's current shareholders' equity:
| Common stock, $10 par |
$400,000 |
| Additional paid-in capital on common stock |
800,000 |
| Total contributed capital |
$1,200,000 |
| Retained earnings |
1,300,000 |
| Total shareholders' equity |
$2,500,000 |
Required:
1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.
2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance.
There should be ten answers. Where the $ is in an answer space and the two blanks in between them.