On June 30, 2014, Stephans Company Showed the Following Data

question 85

True/False

On June 30, 2014, Stephans Company showed the following data on the equity section of their balance sheet:
$\begin{array}{|l|r|r|}\hline \text { Stockholders' equity } & & \\\hline \text { Common stock, } \$ 1 \text { par } & 100,000 \text { shares authorized } &\$40,000 \\\hline & 40,000 \text { shares issued } & \\\hline \text { Paid-in capital in excess of par } & & 260,000 \\\hline \text { Retained earnings } & & 940,000 \\\hline \text { Total stockholder's equity } & & \$ 1,240,000 \\\hline\end{array}$
On July 1, 2014, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share.
- Following this transaction, the number of shares authorized would stay the same, but the number of shares issued would go up by 5%.

---

Definitions:

Profit-Maximizing

The process or strategy of adjusting production and sales to achieve the highest possible profit under given market conditions.

Level Of Production

The total quantity of goods or services produced by a company or an economy during a specific period.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity can dictate prices.

Price Taker

refers to a market participant who does not have the ability to influence prices and must accept the market price as given.