E11-23 (Algo) Comparing Stock Dividends and Stock Splits LO11-6

On July 1, Davidson Corporation had the following capital structure:

Common stock ( $3 par value)	$ 744,000
Additional paid-in capital	1,090,000
Retained earnings	770,000
Treasury stock	0

Required:

Complete the table below for each of the two following independent cases:

Note: Round "Par value per share" amounts to 2 decimal places.

Case 1: The board of directors declared and issued a 40 percent stock dividend when the stock was selling at $5 per share.

Case 2: The board of directors announced a 6-for-5 stock split. The market price prior to the split was $5 per share.

Items	Before Dividend and Split	After Stock Dividend	After Stock Split
Common stock account	$744,000
Par value per share	$3.00
Shares outstanding
Additional paid-in capital	$1,090,000
Retained earnings	$770,000
Total stockholders equity