leyPLUS Weygandt Accounting Principles12 Principles of Accou

leyPLUS Weygandt, Accounting Principles,12 Principles of Accounting 12e (ACC 171/272) sock 500, 000 and eained the folowing per share

Solution

Before Action After Stock Dividend After Stock split Stockholders\' equity Paid-in-capital Common Stock 500000 525000 500000 in excess of par 0 10000 0 Total paid-in-capital 500000 535000 500000 Retained Earnings 900000 865000 900000 Total Stockholders\' equity 1400000 1400000 1400000 O/s shares 50000 52500 100000 Par value per share 10 10 5 Relevant Journal entry Debit Credit for stock dividend Retained Earnings(50000*5%*14) 35000 Common stock(50000*5%*10) 25000 Paid-in capital in excess of par(50000*5%*4) 10000 (50000*5%=2500 shares) For 1:2 stock- split Common stock $ 10 par value(50000*10) 500000 Common stock $ 5 par value(50000*2=100000*5) 500000