The Tanning Bed has 8,500 shares of stock outstanding with a par value of $1 per share and a market value of $12 per share. The balance sheet shows $34,200 in the capital in excess of par account, and $51,300 in the retained earnings account. The firm just announced a 100 percent stock dividend. What will be the value of the common stock account after the dividend?
A) $8,500
B) $10,000
C) $12,750
D) $15,000
E) $17,000

Question

Quizplus · Accepted Answer

The value of the common stock account after a 100 percent stock dividend will be $17,000. This is because the 8,500 shares will double to 17,000 shares due to the 100 percent stock dividend, and since the par value is $1 per share, the common stock account will be 17,000 shares * $1 par value = $17,000.

The Tanning Bed Has 8,500 Shares of Stock Outstanding with a Par