Cannot find the blanks. help! hapter 19 c erto mhoducation.comhm.tpr The ownors

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Cannot find the blanks. help!

hapter 19 c erto mhoducation.comhm.tpr The ownors equity accounts for Hexagen International are shown hore Common stock (S 50 par value) Capital surplus Retained earnings 35,000 320 c00 708,120 $ Total owners' equity $1,063,120 a-1. If the company's stock currenty sells for $20 par share and a 15 percent stock dividend is declared how many new shares wil be distrbuted? (Do not round intermediate calculations.) shares isau 10500 a 2. Show the new equty accoune balances after the stock dividend is paid (Do not round intermediate calculetions. Common stock 40250 Capital surpl Retained earnings Total owners equity b-1.it the declared a 25 paroent stock: didend howr many nesw shares will be distibutad? (Do not roundd intermedlate calculations.) Neew shares isausd 17500 b 2.Show the new equty account balancss atter the stock dividend is paid (Da nt round intermediate calculations.) 43750 Common stock Capital surplas Retained sernings Total owners squity ype here to search 01

Explanation / Answer

a-1.

Current outstanding shares = $ 35,000 / $ .50 = 70,000

Stock dividend = 70,000 x 15% = 10,500.

a-2.

b-1.

b-2.

Since a 25% is a large stock dividend, the issue is done at the par value of the stock, not at market value.

New shares issued 10,500

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