127.Stock dividend and treasury stockAt the beginning of the current year, King Cole, Inc. had 300,000 shares of capital stock outstanding and total stockholders' equity of $1,200,000. During the...

127.Stock dividend and treasury stock


At the beginning of the current year, King Cole, Inc. had 300,000 shares of capital stock outstanding and total stockholders' equity of $1,200,000. During the year, the company earned net income of $325,000, declared cash dividends of $150,000, distributed a 5% stock dividend of 15,000 shares when the market price of the stock was $16 per share, and purchased 3,000 shares of treasury stock at a cost of $13 per share. Compute the following at the end of the current year:


(a) Total stockholders' equity:
(b) Number of shares of stock outstanding:
(c) Book value per share:

128.Stock dividends


What is the effect of a stock dividend?

129.Accounting changes and prior period adjustment


Prior period adjustments affect the income of past accounting periods. Explain how prior period adjustments are shown in the financial statements.