Concin has the following equity accounts on its balance sheet: $\begin{array}{lr}
\text { Common stock }(\$ 0.25 \text { par, } 9 \text { million shares }) & \$ 2,250,000 \
\text { Contributed capital in excess of par } & 89,400,000 \
\text { Retain earnings } & 67,503,189 \
&\$159,153,189
\end{array}$ The current market price of Concin's stock is $24.25. If the firm declares a 10% stock dividend followed by a $0.06 per share cash dividend, what will be the impact on the Common stock account?

Question

Quizplus · Accepted Answer

A 10% stock dividend on 9 million shares results in 900,000 additional shares. At $0.25 par value, this increases the Common stock account by $225,000 (900,000 shares x $0.25).

Concin Has the Following Equity Accounts on Its Balance Sheet