CASE 4 (20 points)

The stockholders equity accounts for a corporation are shown here:

Common stock (3 par value) 90,000

Capital surplus 300,000

Retained earnings 510,000

Total stockholders equity 900,000

Instructions:

1. If the companys stock currently sells for 34 per share and a 15 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. (10 points)

2. If the company declares a three-for-two stock split, how the equity accounts will change? How many shares are outstanding now? What is the new par value per share? (10 points)