On June 30, 2017, Sharper Corporation 's common stock is priced at $62 per share before any stock dividend or split, and the stockholders ' equity section of its balance sheet appears as follows Common stock $10 par value, 120,000 shares authorized, 50,000 shares issued and outstanding $ 500,000 Pa...

1 a Retained earnings Before dividend 660000 10 par value of 25000 dividend shares 250000 After divi ...

On June 30, 2017, Sharper Corporation's common stock is priced at $62 per share before any stock

Question:

On June 30, 2017, Sharper Corporation's is priced at $62 per share before any stock or split, and the stockholders' equity section of its appears as follows.
Common stock-$10 par value, 120,000 shares
authorized, 50,000 shares issued and outstanding . . . . . . . . . . . . . . . $ 500,000
Paid-in capital in excess of par value, . . . . . . . . . . . . . . 200,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660,000
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,360,000
1. Assume that the company declares and immediately distributes a 50% stock This event is recorded by capitalizing retained earnings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares.
a. What is the retained earnings balance?
b. What is the amount of total stockholders' equity?
c. How many shares are outstanding?
2. Assume that the company implements a 3-for-2 stock split instead of the stock in part 1.
Answer these questions about stockholders' equity as it exists after issuing the new shares.
a. What is the retained earnings balance?
b. What is the amount of total stockholders' equity?
c. How many shares are outstanding?
3. Explain the difference, if any, to a stockholder from receiving new shares distributed under a large stock versus a stock split.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...