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On October 31, the equity section of Cullumber AG consists of share capital-ordinary CHF590,000 and retained earnings CHF980,000. Cullumber is considering the following two
On October 31, the equity section of Cullumber AG consists of share capital-ordinary CHF590,000 and retained earnings CHF980,000. Cullumber is considering the following two courses of action: (1) declaring a 10% share dividend on the 59,000, CHF10 par value shares outstanding, or (2) effecting a 2-for-1 share split that will reduce par value to CHF5 per share. The current market price is CHF12 per share. Prepare a tabular summary of the effects of the alternative actions on the components of equity, outstanding shares, and par value per share. Equity Share capital-ordinary CHF Share premium-ordinary Retained earnings Total equity Outstanding shares Before Action CHF After Share Dividend CHF CHF CHF CHF Par value per share CHF CHF CHF After Share Split
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