Effects of the dividend on the shares outstanding

Question

The stockholders' equity section of Maley Corporation's balance sheet consists of common stock ($9 par) $1,233,000 and retained earnings $428,600. A 10% stock dividend (13,700 shares) is declared when the market price per share is $18.

(a) Show the before-and-after effects of the dividend on the components of stockholders' equity.

		Before Dividend		After Dividend
		$		$
		$		$

(b) Show the before-and-after effects of the dividend on the shares outstanding.

		Before Dividend		After Dividend
Outstanding shares