1. The stockholders equity section of the balance sheet of West Wind company at December 31, 2019, is given below:

On 31 January 2020, the board of directors proposed a 5-for-4 stock split. The proposal was approved and new shares were distributed among stockholders.

Compute the number of shares that were distributed among stockholders as a result of 5-for-4 stock split. 3 pts.

1. Compute the par value per share after this split. 2 pts.

2. What accounting entry will be made for this split? 2 pts.

3. Show stockholders equity section of the company immediately after 5-for-4 stock split. 3 pts.

2. Firm A had the following selected items on its balance sheet: (Show your solution)

Cash 28,000,000

Common stock (50 par, 2,000,000 shares outstanding)100,000,000

Additional paid-in capital 10,000,000

Retained earnings 62,000,000

How would each of these accounts appear after: (Show your solution)

a. A cash dividend of 1 per share? 2 pts.

b. A 5 percent stock dividend (fair market value is 100 per share)? 2 pts.

c. A one-for-two reverse split? 2pts.

3. The Capital Structure of Orchard Corp. is as follows:

During the current year, management declared a dividend of $70,000. Dividend on preferred stock are 6% of par value and have been paid each year except for the immediate past year. The number of shares issued and outstanding of both the types of stock have not changed for the last two years.

Calculate the amount of dividend that will be paid to preferred stockholders and common stockholders if:

1. the preferred stock is noncumulative. 2 pts.

2. the preferred stock is cumulative. 2 pts.

The stock holders' equity section of the balance sheet of Western company at December 31, 2013, is given below $ 800.000 400,000 Stockholders' equity: Common stock, $10 par value. 200.000 shares authorized. 80,000 shares issued and outstanding Additional paid-in capital common stock Total paid-in capital Retained earnings Total stockholders' equity $ 1.200.000 2.500.000 $ 3,700,000 On 31 January 2014, the board of directors proposed a 5-for-4 stock split. The proposal was approved and new shares were distributed among stockholders The capital structure of Friends, Inc., is given below! s 160,000 Preferred stock, $20 par value. 10,000 shares authorized. 8,000 shares issued and outstanding Common stock, $10 par value. 100,000 shares authorized , 70,000 shares issued and outstanding Total paid-in capital Retained earnings 700,000 $ 860,000 640,000 Total stockholders' equity $ 1.500,000 During the current year, management declared a dividend of $70,000. Dividend on preferred stock are 6% of par value and have been paid each year except for the immediate past year. The number of shares issued and outstanding of both the types of stock have not changed for the last two years