Problem:
Murphy's, Inc. has 75,000 shares of stock outstanding with a par value of $1.00 per share. The market value is $10.00 per share. The balance sheet shows $73,500 in the capital in excess of par account, $75,000 in the common stock account, and $139,500 in the retained earnings account. The firm just announced a 12 percent (small) stock dividend.
Required:
Question 1: What will the balance in the capital in excess of par account be after the dividend?
- $58,500
- $240,000
- $163,500
- $145,500
- $154,500
Note: Please provide equation and explain comprehensively and give step by step solution.