6.

value: 0.60 points

Squash Delight Inc. has the following balance sheet:

Assets
Cash	$	80,000
Accounts receivable		328,000
Fixed assets		747,000
Total assets	$	1,155,000
Liabilities
Accounts payable	$	264,000
Notes payable		58,000
Common stock (110,000 shares @ $4 par)		440,000
Capital in excess of par		100,000
Retained earnings		293,000
Total liabilities & owners' equity	$	1,155,000

The firms stock sells for $13 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