A company with 100,000 authorized shares of $4 par common stock issued 50,000 sh

Question

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9 per share.  Subsequently, the company declared and issued a 10% stock dividend. The market price of the shares is $20 per share.  

1. What is the effect of the dividend on total equity and total asset?

a.Total equity decreased, and total assets decreased

b.Total equity decreased, and total assets increased

c.Total equity increased, and total assets decreased

d.Total equity increased, and total assets increased

e. None of the above

2. Refer to the previous question. By what amount did total equity and total asset change, if at all? ( If the amount balance or amount did not change, state your answer as "$0"

Explanation / Answer

When company issued stock dividend total equity and total assets will not be changed.

So answer is question 1 = e) None of the above

2) When total equity and total asset does not change so answer is $0

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.