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On October 31, the stockholders' equity section of Carla Vista Company consists of common stock $345,000 and retained earnings $899,000. Carla Vista is considering
On October 31, the stockholders' equity section of Carla Vista Company consists of common stock $345,000 and retained earnings $899,000. Carla Vista is considering the following two courses of action: (1) declaring a 6% stock dividend on the 34,500, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. Stockholders' equity Paid-in capital Common stock In excess of par Total paid-in capital Retained earnings Total stockholders' equity Outstanding shares Par value per share Before Action +A After Stock Dividend tA After Stock Split
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