Following is the shareholders' equity section of the balance sheet of the Everslim Corporation:

$\begin{array} { l }
\text { Share capital: }\ \text { Common shares, } 100,000 \text { shares authorized, }\
65,000 \text { shares issued } & \underline{\$ 650,000} \
\text { Total share capital } & \$ 650,000 \
\text { Retained earnings } & \underline{349,000} \
\text { Total shareholders' equity } & \underline{\$ 999,000} \
\end{array}$

The common shares are currently selling for $15.50 per share.

The number of common shares authorized and issued after the distribution of a 15% common stock dividend is:

A) 100,000 and 65,000
B) 100,000 and 74,750
C) 115,000 and 65,000
D) 115,000 and 74,750

Question

Following is the shareholders' equity section of the balance sheet of the Everslim Corporation:

$\begin{array} { l  }
\text { Share capital: }\ \text { Common shares, } 100,000 \text { shares authorized, }\
65,000 \text { shares issued } & \underline{\$ 650,000} \
\text { Total share capital } & \$ 650,000 \
\text { Retained earnings } & \underline{349,000} \
\text { Total shareholders' equity } & \underline{\$ 999,000} \
\end{array}$

The common shares are currently selling for $15.50 per share.

The number of common shares authorized and issued after the distribution of a 15% common stock dividend is:

A) 100,000 and 65,000
B) 100,000 and 74,750
C) 115,000 and 65,000
D) 115,000 and 74,750

Quizplus · Accepted Answer

The number of authorized shares remains unchanged at 100,000. A 15% stock dividend on 65,000 shares issued results in an additional 9,750 shares (15% of 65,000), making the total issued shares 74,750.

Following Is the Shareholders' Equity Section of the Balance Sheet