Exercise 11-7

On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $351,200and retained earnings $446,000.

Pele is considering the following two courses of action:

(1)	Declaring a6% stock dividend on the87,800$4par value shares outstanding
(2)	Effecting a 2-for-1 stock split that will reduce par value to $2per share.

The current market price is $17per share.

Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares.

Stockholders equity
Paid-in capital	$	$	$
Retained earnings
Total stockholders equity	$	$	$
Outstanding shares

*Need calculations not just answers.

Thank you