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n December 31, the stockholders’ equity section of the balance sheet of R & B Corporation reflected the following:Common stock (par $10; authorized 61,600 shares, outstanding 26,600 shares) $ 266,000Additional paid-in capital 13,600Retained earnings 83,000On February 1 of the following year, a 12 percent stock dividend was issued. The market value of the stock on February 1 was $18 per share.Required:For comparative purposes, prepare the stockholders’ equity section of the balance sheet (a) immediately before the stock dividend and (b) immediately after the stock dividend.

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Shakiru

Answer:R&B Corporation Balance Sheet as at December 31 $

Authorised stock. 616,000

______

Issued stock. 266,000

Additional capital. . 13,600

Retained earnings. 83,000

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Total. 362,600

R&B Corporation Balance Sheet as at February 28. $

Authorised stock. 616,000

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Issued stock. 266,000

Additional paid capital. 13,600

Retained earnings. 83,000

Dividend. ( 33,552)

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Explanation:. 329,048

The authorised stock is shown for record purposes and not added in the summation of the company's equity as the issued stock is only given relevance in summation.

The additional capital is also paid stock dividend as it's part of the running capital of the firm. The total amount of stock dividend is subtracted from the total company's equity capital.

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