On October 31, the stockholders equity section of Opio Companys balance sheet consists of common stock $648,000

Question:

On October 31, the stockholders’ equity section of Opio Company’s consists of $648,000 and retained earnings $400,000. Opio is considering the following two courses of action:
(1) Declaring a 5% stock on the 81,000 $8 shares outstanding or
(2) Effecting a 2-for-1 stock split that will reduce to $4 per share. The current market price is $17 per share.
Instructions
Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares. Use these column headings: Before Action, After Stock and After Stock Split.

Common Stock
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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
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Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...