Identify the effects—both the direction and the dollar amount—of these assumed transactions on the total stockholders’ equity of Townsend Corporation. Each transaction is independent.
a. Declaration of cash dividends of $76 million.
b. Payment of the cash dividend in (a).
c. A 20% stock dividend. Before the dividend, 72 million shares of $1.00 par common stock were outstanding; the market value was $3.875 at the time of the dividend.
d. A 40% stock dividend. Before the dividend, 72 million shares of $1.00 par common stock were outstanding; the market value was $14.25 at the time of the dividend.
e. Purchase of 1,700 shares of treasury stock (par value $1.00) at $3.25 per share.
f. Sale of 800 shares of the treasury stock for $6.00 per share. Cost of the treasury stock was $3.25 per share.
g. A 2-for-1 stock split. Prior to the split, 72 million shares of $1.00 par common stock were outstanding.