What is the amount of the capitalization of retained earnings for the stock dividend? What is the per share cost of the treasury stock purchased? How much net income did the company earn during year 2014? Solution 1)Amount capitalized for stock dividend declared = shares issued and outstanding on date stock dividend declared* market value * % of stock dividend = (40,000 - 3,000 ) *10 * .20 = 37,000 *10 *.20 = $ 74,000 2)per share cost of treasury stock purchased = cost of treasury stock /number of shares held as treasury = 50,000 / 3,000 = $ 16.67 per share 3)Net income = Retained earning balance at end - balance at beginning + DIvidend paid = 400,000 - 340,000 +137,360** = $ 197,360 **Dividend paid: 5jan - 40,000 *.40 =$ 16000 apr5- (40000-3000)*.40 = $ 14,800 july5-(40000-3000).40 = $ 14,800 july 31 -(37000*10*.20)= $74,000 5oct -(47400-3000)*.4 = 17760 total dividend = $ 137,360 .