The Stockholders’ Equity category of Worthy Company’s as of January 1, 2017, appeared as follows:
Common stock, $10 par, 40,000 shares issued and outstanding …………………..$400,000
Additional paid-in capital ……………………………………………………………100,000
Retained earnings ……………………………………………………………………400,000
Total stockholders’ equity ………………………………………………………….$900,000
The following transactions occurred during 2017:
a. Declared a 10% stock to common stockholders on January 15. At the time of the the was selling for $30 per share. The stock was to be issued to stockholders on January 30, 2017.
b. Distributed the stock to the stockholders on January 30, 2017.
Required
1. Identify and analyze the effect of each transaction.
2. Develop the Stockholders’ Equity category of Worthy Company’s as of January 31, 2017, after the stock was issued. What effect did those transactions have on total stockholders’ equity?
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