On October 31, the stockholders’ equity section of Sunland Company consists of common stock $305,000 and retained earnings $891,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on the 30,500, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share.
On October 31, the stockholders’ equity section of Sunland Company consists of common stock $305,000 and retained earnings $891,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on the 30,500, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 19P: Anoka Company reported the following selected items in the shareholders equity section of its...
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Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share.
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