Owner's equity accounts for a company are below:
common stock ($1 par value) $ 10,000
Capital Surplus 180,000
Retained earnings 586,000
Total owners equity $776,500
a. If the company's stock sells for $25 per share and a 10 % stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If the company declared a 25 % stock dividend, how would accounts change?
The solution shows how equity accounts would change in the case of stock dividends.