Assume that Wei Company's Stockholders' Equity category of the balance sheet appears as follows as of
January 1, 2015:
Assume that Wei's common stock is selling at $35 per share on that date.
REQUIRED:
1. Assume that on January 2, 2015, Wei declares a 10% stock dividend to common stockholders to be distributed on April 1, 2015. Identify the accounting equation effects of the transaction on Wei's books.
2. Instead of 1 above, assume that on January 2, 2015, Wei declares a 100% stock dividend to be distributed on April 1, 2015.
Identify the accounting equation effects of the transaction on Wei's books.
3. What are the accounting equation effects on Wei's books when the stock in 2 above, is actually distributed?

Question

Assume that Wei Company's Stockholders' Equity category of the balance sheet appears as follows as of
January 1, 2015:
  Assume that Wei's common stock is selling at $35 per share on that date.
REQUIRED:
1. Assume that on January 2, 2015, Wei declares a 10% stock dividend to common stockholders to be distributed on April 1, 2015. Identify the accounting equation effects of the transaction on Wei's books.
2. Instead of 1 above, assume that on January 2, 2015, Wei declares a 100% stock dividend to be distributed on April 1, 2015.
Identify the accounting equation effects of the transaction on Wei's books.
3. What are the accounting equation effects on Wei's books when the stock in 2 above, is actually distributed?

Quizplus · Accepted Answer

The Answer of Assume that Wei Company's Stockholders' Equity category of the balance sheet appears as follows as of
January 1, 2015:
  Assume that Wei's common stock is selling at $35 per share on that date.
REQUIRED:
1. Assume that on January 2, 2015, Wei declares a 10% stock dividend to common stockholders to be distributed on April 1, 2015. Identify the accounting equation effects of the transaction on Wei's books.
2. Instead of 1 above, assume that on January 2, 2015, Wei declares a 100% stock dividend to be distributed on April 1, 2015.
Identify the accounting equation effects of the transaction on Wei's books.
3. What are the accounting equation effects on Wei's books when the stock in 2 above, is actually distributed?

Assume That Wei Company's Stockholders' Equity Category of the Balance