Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone please give me the right answer. On October 31, the stockholders' equity section of Heins Company consists of common stock $365,000 and retained
Can someone please give me the right answer.
On October 31, the stockholders' equity section of Heins Company consists of common stock $365,000 and retained earnings $903,000. Heins is considering the following two courses of action: (1) declaring a 6% stock dividend on the 36,500, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per sha The current market price is $16 per share Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Common stock 365000 401500 365000 In excess of par 881100 Total paid-in capital 365000 21900 365000 Retained earnings 903000 844600 903000 Total stockholders' equity 1268000 1268000 1268000 Outstanding shares 36500 40150 73000 Par value per share 10 10Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started