Question
On October 31, the stockholders equity section of Heins Company consists of common stock $340,000 and retained earnings $898,000. Heins is considering the following two
On October 31, the stockholders equity section of Heins Company consists of common stock $340,000 and retained earnings $898,000. Heins is considering the following two courses of action: (1) declaring a 5% stock dividend on the 34,000, $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 $14 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.
Exercise 11-15 On October 31, the stockholders' equity section of Heins Company consists of common stock $340,000 and retained earnings $ outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per Prepare a tabular summary of the effects of the alternative actions on the components of stockholders equity, outstanding shar Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Common stock 340000 $ 363800 In excess of par 898000 316200 Total paid-in capital Retained earnings 898000 Total stockholders equity Outstanding shares Par value per shareStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started