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Stock dividend by Rollover Tire Company

The stockholders' equity portion of the balance sheet of Rollover Tire Company is as follows:

Common Stock (2,000,000 shares at $10 par) $20,000,000
Paid-in-Capital in Excess of Par 17,000,000
Retained Earnings 33,000,000
Total $70,000,000

The current market value of Rollover stock is $20 per share. Show what the balance sheet would look like if Rollover declares a 10% stock dividend.

Solution Preview

The stockholders' equity portion of the balance sheet of Rollover Tire Company is as follows:

Common Stock (2,000,000 shares at $10 par) $20,000,000

Paid-in-Capital in Excess of Par 17,000,000

Retained Earnings 33,000,000

Total $70,000,000

The current market value of Rollover stock is $20 per share. Show what the balance sheet would look like if Rollover declares a 10% stock dividend.

"This is a case of small stock ...

Solution Summary

The solution describes what the balance sheet would look like if Rollover declares a 10% stock dividend.

$2.19