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bulgar [2K]
3 years ago
7

On May 1, 2021, Ziek Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Ziek had 200000 shares of $1

par value common stock issued and outstanding. The fair value of Ziek's common stock was $25 per share on May 1, 2021.
As a result of this stock dividend, Ziek's total stockholders' equity:

A) increased by $500000.
B) did not change.
C) decreased by $500000.
D) decreased by $25000.
Business
1 answer:
Alenkinab [10]3 years ago
3 0

Answer:

B) did not change.

Explanation:

Stock dividend is the payment of dividend to stockholder in the form of stock/shares of the company. Stock are issued at the market price and the value of the dividend is transferred from the retained earning to the add-in-capital accounts.

Dividend Value = 200,000 x 10% x 25 = $500,000

Par Value of Stocks = $1 x 20,000 = $20,000

Add-in-capital excess of par common stock = ($25-$1) x 20,000 = $480,000

Following entry will be recorded

Dr. Retained earning                                              $500,000

Cr. Common Stock                                                 $20,000

Cr. Add-in-capital excess of par common stock  $480,000

As all of the accounts are equity accounts and decrease in one equity account and increase in another equity account will not change the total stockholders equity value.

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kakasveta [241]

Answer:

Hmm.

Explanation:

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4 0
3 years ago
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Leno4ka [110]

Answer:

It increases by 50 units.

Explanation:

Current break even point = \frac{Fixed\:Cost}{Contribution\:per\:unit}

Here, fixed cost = $4,500

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Current break even point = \frac{4,500}{10} = 450 units

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Break even sales in units = \frac{4,500}{9} = 500 units

Difference in original and revised break even = Revised - Original = 500 - 450 units = 50 units,

Thus original break even increases by 50 units, = 50/450 = 11.11% increase.

Final Answer

It increases by 50 units.

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