On October 1, Chile Corporation’s stockholders’ equity is as follows.
|
Common stock, $5 par value |
$200,000 |
|
Paid in capital in excess of par value |
25,000 |
|
Retained earnings |
75,000 |
|
Total stockholders’ equity |
$300,000 |
On October 1, Chile declares and distributes a 10% stock dividend when the market value of the stock is $15 per share.
Instructions
(a) Compute the book value per share (1) before the stock dividend and (2) after the stock dividend. (Round to two decimals.)
(b) Indicate the balances in the three stockholders’ equity accounts after the stock dividend shares have been distributed.