Exercise 11-7 On October 31, the stockholders? equity section of Pele Company?s balance sheet consists of common stock $580,800and retained earnings $446,200. Pele is considering the following two courses of action:

(1)	Declaring a6% stock dividend on the96,800$6par value shares outstanding
(2)	Effecting a 2-for-1 stock split that will reduce par value to $3per share.

The current market price is $14per share. Prepare a tabular summary of the effects of the alternative actions on the company?s stockholders? equity and outstanding shares.

Pele Company?s Balance Sheet
Before Action	After Stock Dividend	After Stock Split
Stockholders? equity
Paid-in capital	$	$	$
Retained earnings
Total stockholders? equity	$	$	$
Outstanding shares

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