Problem:
Stock Dividends The owner's equity accounts for Hexagon International are shown here:
Common stock ($1 par value) $10,000
Capital surplus $ 180,000
Retained earnings $ 586,500
Total owner's equity $ 776,500
Q1. If Hexagon stock currently sells for $25 per share and a 10% stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
Q2. If Hexagon declared a 25% stock dividend, how would the accounts change?