The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $6 per share.
Common stock (50,000 shares at $2 par) ........................$100,000
Capital in excess of par…………………......…………….…..100,000
Retained earnings ...............................................................250,000
$450,000
The firm intends to first declare a 15 percent stock dividend and then pay a 5 cent cash dividend (which is also caused by a reduction of retained earnings). Show the capital section of the balance sheet after the first transaction and then after the second transaction.