Gilligan Corporation was established on February 15,Year 1.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 31,Year 3,Gilligan's stockholders' equity accounts report the following balances:
At the end of Year 3,Gilligan decides to issue a 5% stock dividend.At the time of issue,the market price of the stock was $22 per share.
-What is the number of shares outstanding after the stock dividend is issued?

Question

Gilligan Corporation was established on February 15,Year 1.Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock.As of December 31,Year 3,Gilligan's stockholders' equity accounts report the following balances:
  At the end of Year 3,Gilligan decides to issue a 5% stock dividend.At the time of issue,the market price of the stock was $22 per share.
-What is the number of shares outstanding after the stock dividend is issued?

Quizplus · Accepted Answer

Number of shares issued in stock dividend = 55,000 Outstanding shares × 5% = 2,750
Number of shares outstanding after stock dividend = Shares outstanding before stock dividend of 55,000 + Shares issued in stock dividend of 2,750 = 57,750

Gilligan Corporation Was Established on February 15,Year 1