Carla Vista Co. has had 4 years of record earnings. Due to this success, the market price of its 500,000 shares of $4 par value common stock has increased from $14 per share to $55. During this period, paid-in capital remained the same at $6,000,000. Retained earnings increased from $4,500,000 to $30,000,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders equity, and (c) par value per share. (a) 1. Stock dividend - retained earnings $Entry field with correct answer 25875000 2. 2-for-1 stock split - retained earnings $Entry field with correct answer 30000000 (b) Carla Vista Co. Original Balance After Dividend After Split Paid-in capital $Entry field with incorrect answer 2000000 $Entry field with incorrect answer 6125000 $Entry field with incorrect answer 2000000 Retained earnings Entry field with correct answer 30000000 Entry field with correct answer 25875000 Entry field with correct answer 30000000 Total stockholders equity $Entry field with incorrect answer 32000000 $Entry field with incorrect answer 32000000 $Entry field with incorrect answer 32000000 Shares outstanding Entry field with correct answer 500000 Entry field with correct answer 575000 Entry field with correct answer 1000000 (c) 1. Stock dividend - par value per share $Entry field with correct answer 4 2. 2-for-1 stock split - par value per share $Entry field with correct answer 2