Why capital in excess of par account

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Reference no: EM132070869

Val's Marina Supply has 3,500 shares of stock outstanding with a par value of $1.00 per share and a market value of $19 per share. The balance sheet shows $3,500 in the common stock account, $24,000 in the capital in excess of par account, and $31,400 in the retained earnings account. The firm just announced a 100 percent stock dividend. What is the value of the capital in excess of par account after the dividend? A. $0 B. $20,500 C. $24,000 D. $55,500 E. $87,000 The capital in excess of par account will remain at $24,000 as it does not change with a large stock dividend.

Why capital in excess of par account does not change with a large stock dividend ?

Reference no: EM132070869

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