On October 31, the stockholders' equity section of Cullumber Company consists of common stock $370,000 and retained earnings $904,000. Cullumber is considering the following two courses of action: (1) declaring a 6% stock dividend on the 37,000, $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 $16 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. After After Stock Before Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock In excess of par Total paid-in capital Retained earnings Total stockholders' equity Outstanding shares $
On October 31, the stockholders' equity section of Cullumber Company consists of common stock $370,000 and retained earnings $904,000. Cullumber is considering the following two courses of action: (1) declaring a 6% stock dividend on the 37,000, $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 $16 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. After After Stock Before Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock In excess of par Total paid-in capital Retained earnings Total stockholders' equity Outstanding shares $
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 5SEA: STOCKHOLDERS EQUITY SECTION After closing its books on December 31, Pro Parts stockholders equity...
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