Gilligan Corporation was established on February 15, Year 1. Gilligan is authori

Question

Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 325,000 shares of $12 par value common stock. As of December 30, Year 1, Gilligan's stockholders' equity accounts report the following balances:

On December 31, Year 1, Gilligan decides to issue a 8% stock dividend. At the time of issue, the market price of the stock was $36 per share.

What is the number of shares outstanding after the stock dividend is issued?

Multiple Choice

327,600 shares

35,100 shares

29,900 shares

32,500 shares

Common stock, $12 par, 325,000 shares authorized 32,500 shares issued and outstanding $ 390,000 Paid-in capital in excess of par - Common 65,000 $ 455,000 Retained earnings 440,000 Total Stockholders' Equity $ 895,000

Explanation / Answer

35,100 shares Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount number of shares outstanding on Dec 30            32,500.00 Stock Dividend on Dec 31 at 8% = 32500*.08               2,600.00 number of shares outstanding after the stock dividend is issued            35,100.00

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