Question

On December 31, 2016, the shareholders' equity section of the balance sheet of R&L Corporation reflected the following: Common shares (no-par value; authorized 60,000 Shares, outstanding 22,000 shares) Contributed uxplus Retained earnings $ 220,000 11,700 72,000 On February 1, 2017, the board of directors declared a 10 percent stock dividend to be issued on April 30, 2017. The market value of the shares on February 1, 2017, was $16.50 per share. Required: 1. For comparative purposes, prepare the shareholders' equity section of the balance sheet (a) immediately before the stock dividend and immediately after the stock dividend. (Amounts to be deducted should be indicated with a minus sign.) Shareholders' Equity Before Stock Dividend Adjustment After Stock Dividend S 220.000 Contributed capital Common shares Dividends Contributed surplus Total contributed capital Retained eamings Dividends Total shareholders' equity Rel Lantimi I WAN p 11,700 231.700 72,000 X S220,000 36,300 36,300 11,700 36,300 268,000 X 72,000 X (36,300) (36,300) 0 S 303,700 a tion is S303,700 $ in alla form points lacus .

Answer 1

Solution:

Particulars	Before stock dividend	Adjustment	After stock dividend
Contributed capital:
Common shares	$220,000.00	$36,300.00	$256,300.00
Contributed surplus	$11,700.00	$0.00	$11,700.00
Total contributed capital	$231,700.00	$36,300.00	$268,000.00
Retained earnings	$72,000.00	-$36,300.00	$35,700.00
Total shareholder's equity	$303,700.00	$0.00	$303,700.00