The owners’ equity accounts for Trans World International are shown here:
Common stock ($1 par value): $ 55,000
Capital surplus: 239,000
Retained earnings: 790,000
Total owners’ equity: $ 1,084,000
Requirement 1: Assume Trans World stock currently sells for $32 per share and a stock dividend of 10 percent is declared.
(a) How many new shares will be distributed?
New shares issued:
(b) Show the new balance for each equity account.
Common stock:
Capital surplus:
Retained earnings:
Total owners’ equity:
Requirement 2: Now assume that instead Trans World declares a stock dividend of 14 percent.
(a) How many new shares will be distributed?
New shares issued:
(b) Show the new balance for each equity account.
Common stock:
Capital surplus:
Retained earnings:
Total owners’ equity: