Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Oak Ridge Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 4% stock dividend,

Oak Ridge Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 4% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $15 per share. Help Oak Ridge make its decision by completing the following chart (treat each possibility independently):

Before Action After Cash Dividend After Stock Dividend After Stock Split
Total assets $1,220,000 $enter a total amount for the first part $enter a total amount for the first part $enter a total amount for the first part
Total liabilities $253,000 $enter a total amount for section one of the second part $enter a total amount for section one of the second part $enter a total amount for section one of the second part
Shareholders equity
Common shares 551,000 enter a dollar amount enter a dollar amount enter a dollar amount
Retained earnings 416,000 enter a dollar amount enter a dollar amount enter a dollar amount
Total shareholders equity 967,000 enter a total amount for section two of the second part enter a total amount for section two of the second part enter a total amount for section two of the second part
Total liabilities and shareholders equity $1,220,000 $enter a total amount for the second part $enter a total amount for the second part $enter a total amount for the second part
Number of common shares 100,000 enter a number of shares enter a number of shares enter a number of shares

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

Advanced Level Audit And Assurance Exam Room Notes 2017

Authors: ACA Simplified

1st Edition

1545501653, 978-1545501658

More Books

Students also viewed these Accounting questions