Accounting 25th Edition by Carl Warren, James Reeve, Jonathan Duchac

Exercise 4

An owner of 2,500 shares of Simmons Company common stock receives a stock dividend of 50 shares.
a. What is the effect of the stock dividend on the stockholder's proportionate interest (equity) in the corporation
b. How does the total equity of 2,550 shares compare with the total equity of 2,500 shares before the stock dividend