1. Chiwishas Companys capital structure on December 30, 2019 was as follows:

Common stock (K1 par, 200,000 shares) K200,000

Paid-in capital on common stock 20,000

Retained earnings 780,000

Total stockholders equity K1,000,000

His companys net income for 2019 was K150,000. It paid out 40% of earnings in dividends. The stock was selling at K6 per share on December 30. Assuming the company declared a 5percent stock dividend on December 31, what is the reformulated capital structure on December 31?

2. Ms. Janece owns a consulting firm specializing in difficult accounting problems, and has 10,000 shares of stock outstanding, each selling at K66. With a 10percent stock dividend, each of her stockholders receives one additional share for each 10 owned.

Before the stock dividend, the equity portion of Janeces consulting firms balance sheet looks like this:

Common stock (K1 par, 10,000shares) K10,000

Paid-in capital on common stock 200,000

Retained earnings 290,000

Total stockholders equity K500,000

1. What would happen if a 100percent stock dividend were declared?

2. If there was a 2 for 1 stock split?