Smart Mart Inc. is considering one of three options: (1) Paying a $0.40 cash dividend, (2) Distributing
Question:
Smart Mart Inc. is considering one of three options:
(1) Paying a $0.40 cash dividend,
(2) Distributing a 5% stock dividend
(3) Effecting a 2-for-1 stock split.
The current fair value is $14 per share.
Instructions
In the chart below, indicate the financial impact on the financial statement items listed of each action under consideration.
Transcribed Image Text:
Before Action $1,875,000 $ 75,000 1,200,000 600,000 Total shareholders' equity 1,800,000 Total liabilities and shareholders' equity $1,875,000 Number of common shares 60,000 Total assets Total liabilities Common shares Retained earnings (1) After Cash Dividend (2) After Stock Dividend (3) After Stock Split
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Related Book For
Accounting Principles Volume 2
ISBN: 9781119786634
9th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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