Samuel's has 42,000 shares of stock outstanding with a par value of $1 per share and a market price per share of $41.The balance sheet shows $1,358,000 in the capital in excess of par account and $2,212,500 in the retained earnings account.The firm just announced a stock dividend of 50 percent.What is the value of the capital in excess of par account after the dividend?

Question

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The capital in excess of par account value remains unchanged at $1,358,000 after a stock dividend. A stock dividend redistributes shares to existing shareholders without affecting the cash or the capital in excess of par accounts. It increases the common stock and retained earnings accounts but does not change the capital in excess of par value.

Samuel's Has 42,000 Shares of Stock Outstanding with a Par