STOCK DIVIDENDS AND STOCK SPLITS Murphy’s Products balance sheet includes total assets of $620,000 and the following equity account balances at December 31, 2008:

Capital stock:

Common stock, $8 par, 10,000 shares issued and outstanding

$ 80,000 Paid-in capital in excess of par 44,000 Total capital stock $124,000 Retained earnings 53,600 Total stockholders’ equity $177,600 Murphy’s common stock is selling for $24 per share on December 31, 2008.

Required:

. Determine how much Murphy’s Products would have reported for total assets and retained earnings on December 31, 2008, if the firm had declared and paid a

$10,000 cash dividend on December 31, 2008. Provide the journal entry for this cash dividend.

. Determine how much Murphy would have reported for total assets and retained earnings on December 31, 2008, if the firm had issued a 10 percent stock dividend on December 31, 2008. Provide the journal entry for this stock dividend.

. How much would Murphy have reported for total assets and retained earnings on December 31, 2008, if the firm had effected a 2-for-1 stock split on December 31, 2008? Is a journal entry needed to record the stock split? Why or why not?