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The Percolator Company has the following capital structure: Common stock ($5 par, 250,000 shares) $1,250,000...
The Percolator Company has the following capital structure: Common stock ($5 par, 250,000 shares) $1,250,000 Contributed capital in excess of par $5,000,000 Retained earnings $4,000,000 The company declares a 20% stock dividend. The pre-stock dividend market price of the company's stock is $50. Determine the balance in the common stock account after the stock dividend.
Solutions
Expert Solution
| Shares outstanding after Common stock dividend = Current shares outstanding * ( 1 + stock dividend % ) = 250000 * ( 1 + 20% ) = | 300000 |
| Shares outstanding after Common stock dividend | 300000 |
| (*) Par value per share | 5 |
| Balance in the common stock account after the stock dividend | 1500000 |
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