Fredericksburg Corporation had issued and outstanding 150,000 shares of $8 par value common stock at January 1, 2014 with a retained earnings balance of $750,000. Fredericksburg issued a 12% stock dividend to its common shareholders. At the time of the dividend, the market value of the stock was $17 per share.
Required:
a) What is the total dollar amount of the stock dividend?
b) Describe how the stock dividend will affect Fredericksburg's stockholders' equity accounts.
c) How many shares of common stock are outstanding after the stock dividend?

Question

Quizplus · Accepted Answer

The Answer of Fredericksburg Corporation had issued and outstanding 150,000 shares of $8 par value common stock at January 1, 2014 with a retained earnings balance of $750,000. Fredericksburg issued a 12% stock dividend to its common shareholders. At the time of the dividend, the market value of the stock was $17 per share.
Required:
a) What is the total dollar amount of the stock dividend?
b) Describe how the stock dividend will affect Fredericksburg's stockholders' equity accounts.
c) How many shares of common stock are outstanding after the stock dividend?

Fredericksburg Corporation Had Issued and Outstanding 150,000 Shares of $8