Alexander, inc., declared and distributed a 10 percent stock dividend on its 700,000 shares of outstanding $5 par value common stock when the stock was selling for $12 per share. the outstanding shares had originally been sold at $8 per share. the balance in retained earnings before the declaration of the stock dividend, but after the addition of the current year’s net income, was $995,000. prepare the stockholders’ section of alexander’s balance sheet to reflect these facts.
common stock
addt'nal paid-in capital-common stock

retained earnings
total stockholders' equity

Common Stock: 3,500,000 Additional paid-in capital-Common Stock: 2,100,000  Retained earnings: 995,000

Total stockholders' equity: 6,595,000

Explanation:

Common Stock: Values at the common stocks par value. (3,500,000 = 700,000 * 5) Additional paid-in capital-Common Stock: Difference between the paid price by stockholders and par value. The negations made after the issue of the stocks are not taken into account because they don´t include the company. (2,100,000 = 700,000 * 3) Retained earnings: As the dividend are declared after the end of the accountable year they are not taken into account. So the retained earnings final balance include the beginning balance plus the net income of the accountable period. (995,000) Total stockholders' equity: Addition of the previous items.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan