Stock Dividends and Stock Splits} Lopez Products Ltd.'s statement of financial position includes total assets of ($
Question:
Stock Dividends and Stock Splits}
Lopez Products Ltd.'s statement of financial position includes total assets of \(\$ 587,000\) and the following equity account balances at December 31, 2018:
Lopez's common shares are selling for \(\$ 12\) per share on December 31,2018 .
\section*{Required:}
1. How much would Lopez Products have reported for total assets and retained earnings on December 31, 2018, if the firm had declared and paid a \(\$ 15,000\) cash dividend on December 31, 2018? Prepare the journal entry for this cash dividend.
2. How much would Lopez have reported for total assets and retained earnings on December 31, 2018, if the firm had issued a \(15 \%\) stock dividend on December 31, 2018? Prepare the journal entry for this stock dividend.
3. CONCEPTUAL CONNECTION How much would Lopez have reported for total assets and retained earnings on December 31, 2018, if the firm had effected a 2-for-1 stock split on December 31, 2018? Is a journal entry needed to record the stock split? Why or why not?
Problem
Step by Step Answer:
Cornerstones Of Financial Accounting
ISBN: 9780176707125
2nd Canadian Edition
Authors: Jay Rich, Jefferson Jones, Maryanne Mowen, Don Hansen, Donald Jones, Ralph Tassone