A summary of the transactions affecting the stockholders

equity of

A summary of the transactions affecting the stockholders' equity of Riverton Corporation during
the current year follows.

Prior period adjustment (net of income tax benefit)....................................$ (160,000)

Issuance of common stock: 10,000 shares of $10 par value

capital stock at $68 per share ..................................................................680,000

Declaration and distribution of 5% stock dividend (11,500 shares,

market price $40 per share) ................................................................. (460,000)

Purchased 1,000 shares of treasury stock at $70 ...........................................(70,000)

Reissued 500 shares of treasury stock at a price of $72 per share..........................36,000

Net income .....................................................................................1,690,000

Cash dividends declared .....................................................................(285,400)

Instructions

a. Prepare a statement of stockholders' equity for the year. Use these column headings and
beginning balances. (Notice that all additional paid-in capital accounts are combined into a
single column.)

b. What was the overall effect on total stockholders' equity of the 5 percent stock dividend of
11,500 shares? What was the overall effect on total stockholders' equity of the cash dividends
declared? Do these two events have the same impact on stockholders' equity? Why or why not?

A summary of the transactions affecting the stockholders equity of

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