1.
On December 31,2011, the shareholders' equity section of the balance sheet of R & L
Corporation reflected the following: On February 1,2012, the board of directors declared a 12
percent stock dividend to be issued April 30,2012. The market value of the shares on February
1,2012, was $16 per share. Required: For comparative purposes, prepare the shareholders'
equity section of the balance sheet (a) immediately before the stock dividend and (b)
immediately after the stock dividend. (Omit the "$" sign in your response.)
Solution
Hi,
Please find the alternative solution as follows:
Thanks.
Before Stock Dividend After Stock Dividend
Contributed Capital
Common Shares, Par $10
auth 60000 shares
258000 288960
Additional Paid in
Capital
13600 32176
271600 321136
Retained Earnings 83000 33464
Total Shareholder's
Equity
354600 354600