Question

Val's Marina Supply has 7,500 shares of stock outstanding with a par value of $1 per share and a market value of $28 per share. The balance sheet shows $7,500 in the common stock account, $32,400 in the capital in excess of par account, and $81,800 in the retained earnings account. The firm just announced a 100 percent stock dividend. What is the value of the capital in excess of par account after the dividend

Answer 1

The value of the capital in excess of par account after the stock dividend by Val's Marina Supply is $234,900.

Data and Calculations:

Outstanding stock = 7,500 shares

Par value of shares = $1 per share

Market value of shares = $28 per share

Common Stock account = $7,500

Capital in excess of par account = $32,400

Retained Earnings = $81,800

Stock dividend = 100%

Analysis:

Retained Earnings $210,000 Common Stock $7,500 Capital in excess of par account $202,500 (7,500 x $28)

Thus, the value of the capital in excess of par account after the stock dividend by Val's Marina Supply is $234,900 ($32,400 + $202,500).

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