On January 1, Edmiston Corporation had 2,000,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15/share.As a result of this event,
A)Edmiston's Paid-in Capital in Excess of Par Value account increased $1,000,000.
B)Edmiston's total stockholders' equity was unaffected.
C)Edmiston's Stock Dividends account increased $3,000,000.
D)All of these answer choices are correct.

Question

Quizplus · Accepted Answer

The stock dividend increases the number of shares outstanding and reduces the par value per share. The total par value of the shares remains the same, so there is no effect on the Paid-in Capital in Excess of Par Value account. The total stockholders' equity is also unaffected, as the increase in the number of shares is offset by the decrease in the par value per share. The Stock Dividends account is increased by the market value of the shares issued, which is $3,000,000.

On January 1, Edmiston Corporation Had 2,000,000 Shares of $10