The stockholders\' equity section of Jun Company\'s balance sheet as of April 1

Question

The stockholders' equity section of Jun Company's balance sheet as of April 1 follows. On April 2, Jun declares and distributes a 10% stock dividend. The stock's per share market value on April 2 is $10 (prior to the dividend). Common stock $5 par value, 495,000 shares authorized, 260,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $1,300,000 610,000 893,000 $2,803,000 Prepare the stockholders' equity section immediately after the stock dividend JUN COMPANY Stockholders' Equity April 2 (after stock dividend) s 2,722,5008 857,500 3,580,000 398,000 $ 3,978,000 Common stock Paid-in capital in excess of par value, common stock Total paid-in capital Retained earnings Total stockholders' equity

Explanation / Answer

Common stock (260000+26000)*5 = 1430000

Paid-in-capital in excess of par value, common stock {610000+(26000*5) = 740000

Total paid-in-capital = 2170000

Retained Earnings (893000-260000) = 633000

Total stockholders' equity = 2803000

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