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boats and bait has 59,000 shares outstanding that sell for a price of $55 per share. the stock has a par value of $2 per share. the company's balance sheet shows capital surplus of $90,000 and retained earnings of $130,000. if the company declares a stock dividend of 20 percent, what is the new common stock value on the balance sheet?

Respuesta :

The new common stock value on the balance sheet will be $141,600

It is given that boats and bait have 59,000 shares outstanding that are sold for a price of $55 per share. First, we will find out the common stock value on the balance sheet prior to the dividend

=> No. of stock outstanding * Face value per share.

=> 59000 * 2

=> $118,000

The stock dividend is 20%. So, to find the new shares to be issued we can solve:

=> 59000 * 20%

=> 59000 * 0.2

=> 11,800 shares

Now we will have to find out the total stock outstanding after the dividend. This can be calculated by:

=> 59000 + 11800

=> 70,800 Shares

The value of common stock after the stock dividend will be

=> 70,800 * 2

=> $141,600

Hence, the common stock value will be $141,600 after the dividend.

To know more about the Stock Dividend, Click here:

https://brainly.com/question/28392301

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