Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

eBook Problem 10-08 A firm has the following balance sheet: Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 10,000 Accounts receivable 162,000 Long-term

image text in transcribed
image text in transcribed
eBook Problem 10-08 A firm has the following balance sheet: Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 10,000 Accounts receivable 162,000 Long-term debt 97,000 Inventory 80,000 Common stock ($6 par; 27,000 4,500 shares outstanding) Plant and equipment 170,000 Additional paid-in capital 146,000 Retained earnings 142,000 $422,000 $422,000 a. Construct a new balance sheet showing the impact of a four-for-one split. If the current market price of the stock is $54, what is the price after the split? Round the par value and the market price after the split to the nearest cent, the number of shares outstanding to the nearest whole number, and the other answers to the nearest dollar. Assets Liabilities and Equity Cash $ Accounts payable Accounts receivable $ Long-term debt $ Inventory Common stock $ ($ par; shares outstanding) Plant and equipment $ Additional paid-in capital Retained earnings $ $ $ $ $ $ Price of the common stock after the split: $ b. Construct a new balance sheet showing the impact of a 15 percent stock dividend. After the stock dividend, what is the new price of the common stock? Use the original balance sheet from the problem statement. Round the par value and the market price after the stock dividend to the nearest cent, the number of shares outstanding to the nearest whole number, and the other answers to the nearest dollar. Assets Cash $ Liabilities and Equity Accounts payable Long-term debt Common stock Accounts receivable $ $ Inventory t 3 LUITY-Leul UEUL $ ALLOUTILS Teceivable Inventory $ $ Common stock ($ par; Plant and equipment shares outstanding) Additional paid-in capital Retained earnings $ $ $ $ $ Price of the common stock after the split: $ b. Construct a new balance sheet showing the impact of a 15 percent stock dividend. After the stock dividend, what is the new price of the common stock? Use the original balance sheet from the problem statement. Round the par value and the market price after the stock dividend to the nearest cent, the number of shares outstanding to the nearest whole number, and the other answers to the nearest dollar. Assets Liabilities and Equity Cash $ Accounts payable Accounts receivable $ Long-term debt $ Inventory Common stock $ ($ par; shares outstanding) Plant and equipment $ Additional paid-in capital Retained earnings $ $ $ $ $ $ Price of the common stock after the stock dividend: $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental accounting principle

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

21st edition

1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587

More Books

Students also viewed these Finance questions

Question

LO2 Discuss the constraints faced in a typical recruitment process.

Answered: 1 week ago