Question-based on, "tabular summary". I have got the red box outline incorrect. "Total paid". On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings$897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $10 parvalue 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.AfterAfterBeforeStockStockActionDividendSplitStockholders' equityPaid-in capitalCommon stock2$335,0002$355,1002$335,000In excess of par12,060Total paid-in capital335,000368,160335,000Retained earnings897,000864,840897,000Total stockholders'$1,232,0002$1,232,0002$1,232,000equityOutstanding shares33,50035,51067,000Par value per share1010%24

Answered: On October 31, the stockholders' equity…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 13EB: Nutritious Pet Food Companys board of directors declares a large stock dividend (50%) on June 30...

See similar textbooks

Related questions

Concept explainers

Question

100%

Question-based on, "tabular summary".

I have got the red box outline incorrect. "Total paid".

On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings
$897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $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
$16 per share.
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares,
and par value per share.
After
After
Before
Stock
Stock
Action
Dividend
Split
Stockholders' equity
Paid-in capital
Common stock
2$
335,000
2$
355,100
2$
335,000
In excess of par
12,060
Total paid-in capital
335,000
368,160
335,000
Retained earnings
897,000
864,840
897,000
Total stockholders'
$
1,232,000
2$
1,232,000
2$
1,232,000
equity
Outstanding shares
33,500
35,510
67,000
Par value per share
10
10
%24

Expert Solution

Step 1 Introduction

Stockholder's equity: It is also known as the balance of assets available to shareholders after payment of all liabilities. Under the stockholder equity Includes Common Stock, Paid-in Capital, Retained Earnings, and Treasury Stock.

$S t o c k h o l d e r ’ s e q u i t y = T o t a l a s s e t s - T o t a l l i a b i l i t i e s$

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions