Answer:
Sharper Corporation's Stockholders' Equity Section of Balance Sheet:
Common Stock:
Authorized Capital 120,000, $10 par value $0
Issued capital 90,000 at $10 par = $900,000
APIC = $400,000
Retained Earnings = $310,000
Total Stockholders' Equity = $1,610,000
2 Number of shares outstanding after the dividend distribution is 90,000 shares.
Explanation:
1. The dividend per share was calculated as follows:
50% of $10 = $5 per share
Total dividends = $5 x 90,000 = $450,000.
2. The Retained Earnings changed from $760,000 to $310,000 ($760,000 - $450,000). Dividends are paid out of retained earnings.
3. The number of shares outstanding after the distribution of dividends did not change. It could change if there were a stock split or some shares were repurchased under Treasury Stock.
