Required information [The following information applies to the questions displayed below.] Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.) Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings Answer is complete but not entirely correct. After After 2- 100% for-1 Stock Stock Dividend Split $ 2,200 Total stockholders' equity Shares outstanding Par value per share Share price Before $1,000 55,000 56,000 23,450 $ 79,450 1,000 $ 1.00 $ 122 $ $ 53,000 X 55,200 55,200 110,400 2,200 x 1.00 59 $ 1,100 X $ $ 53,000 X 54,100 55,200 X $ 109,300 2,200 x 0.50 59 x
Required information [The following information applies to the questions displayed below.] Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.) Common stock, $1 par value Additional paid-in capital Total paid-in capital Retained earnings Answer is complete but not entirely correct. After After 2- 100% for-1 Stock Stock Dividend Split $ 2,200 Total stockholders' equity Shares outstanding Par value per share Share price Before $1,000 55,000 56,000 23,450 $ 79,450 1,000 $ 1.00 $ 122 $ $ 53,000 X 55,200 55,200 110,400 2,200 x 1.00 59 $ 1,100 X $ $ 53,000 X 54,100 55,200 X $ 109,300 2,200 x 0.50 59 x
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 11P
Related questions
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![!
Required information
[The following information applies to the questions displayed below.]
Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to
over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1
stock split.
Required:
1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders'
equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)
X Answer is complete but not entirely correct.
After
100%
Stock
Dividend
$ 2,200
53,000
55,200
55,200 X
110,400
Common stock, $1 par value
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
Shares outstanding
Par value per share
Share price
Before
$ 1,000
55,000
56,000
23,450
$
79,450
1,000
$ 1.00
$ 122
$
$
2,200 x
After 2-
for-1
Stock
Split
$ 1,100 x
53,000
54,100
55,200
$ 109,300
1.00 $
59
$
2,200 x
0.50
59 x](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F686efa8b-b30e-4d7a-a343-e2084ffbea38%2F514aff05-e291-4eb2-9c58-f508e6dd41b5%2Fg0xgba1_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to
over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1
stock split.
Required:
1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders'
equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)
X Answer is complete but not entirely correct.
After
100%
Stock
Dividend
$ 2,200
53,000
55,200
55,200 X
110,400
Common stock, $1 par value
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
Shares outstanding
Par value per share
Share price
Before
$ 1,000
55,000
56,000
23,450
$
79,450
1,000
$ 1.00
$ 122
$
$
2,200 x
After 2-
for-1
Stock
Split
$ 1,100 x
53,000
54,100
55,200
$ 109,300
1.00 $
59
$
2,200 x
0.50
59 x
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