14)

Squash Delight Inc. has the following balance sheet:

Assets
Cash	$	35,000
Accounts receivable		290,000
Fixed assets		721,000
Total assets	$	1,046,000
Liabilities
Accounts payable	$	334,000
Notes payable		57,000
Common stock (140,000 shares @ $2 par)		280,000
Capital in excess of par		100,000
Retained earnings		275,000
Total liabilities & owners' equity	$	1,046,000

The firms stock sells for $10 a share.

a.	Show the effect on the capital accounts of a two-for-one stock split. (Do not round intermediate calculations and round your answers to the nearest whole dollar.)

Common stock	$
Capital excess of par	$
Retained earnings	$
Total equity	$

b.	Show the effect on the capital accounts of a 10 percent stock dividend. Part b is separate from part a. In part b do not assume the stock split has taken place. (Do not round intermediate calculations and round your answers to the nearest whole dollar.)

Common stock	$
Capital excess of par	$
Retained earnings	$
Total equity	$

c.	Based on the balance in retained earnings, which of the two dividend plans is more restrictive on future cash dividends?
	Stock split Stock dividend