A corporation declared and issued a 15% stock dividend on November 1. The follow

Question

A corporation declared and issued a 15% stock dividend on November 1. The following up-to-date data were available immediately prior to the dividend:

Retained Earnings %u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026 $750,000

Shares issued and outstanding %u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026.      60,000

Market value per share %u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026. $         15

Par value per share %u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026%u2026. $          5

The amount that the total stockholders%u2019 equity will increase (decrease) as a result of recording this stock dividend is:

Explanation / Answer

total stockholders' equity before stock dividend
Common stock (60,000 x $5 par) $300,000
retained earnings $750,000
Total SE $1,050,000

Journal entry:
Dr Retained earnings $135,000 (9,000 new shares x $15)
Cr Common stock $45,000 (9,000 x $5 par)
Cr Paid-in capital in excess of par $90,000

Total stockholders' equity after stock dividend
Common stock (69,000 x $5 par) $345,000
Paid-in capital in excess of par $90,000
retained earnings $769,000
Total SE $1,204,000, i.e.

difference = 154000

So the answer is $154000

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