2 of 3 Exercise 116 Stock s and per share book values LO P2

2 of 3 Exercise 11-6 Stock s and per share book values LO P2 at the $40 per share on February 28 Exercise 11-6 Part 2 ferences and total book value of 42.642

Solution

stock dividend = 10%

number of new shares issued = 53,000 * 10% =>5,300.

total shares after issue of stock dividend = 53,000 +5,300 =>58,300.

now,

book value per share = total stockholder\'s equity / new number of shares

=>$2,260,000 / 58,300

=>$38.765.

total shares of stock holder after stockdividend = 650 + 10% =>715 shares.

now,

total book value of shares after stock dividend = 715 shares * $38.765

=>$27,717.

	Before	After
Book value per share	$42.642	$38.765
Total book value of shares	$27,717	$27,717