Question
On October 31, the stockholders equity section of Heins Company consists of common stock $325,000 and retained earnings $895,000. Heins is considering the following two
On October 31, the stockholders equity section of Heins Company consists of common stock $325,000 and retained earnings $895,000. Heins is considering the following two courses of action: (1) declaring a 6% stock dividend on the 32,500, $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 $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.
Before Action | After Stock Dividend | After Stock Split | |
---|---|---|---|
Stockholder's Equity | |||
Paid-In Capital | |||
Common Stock | ??? | ??? | ??? |
In Excess of Par | ??? | ??? | ??? |
Total Paid-in Capital | ??? | ??? | ??? |
Retained Earnings | ??? | ??? | ??? |
Total Stockholder's Equity | ??? | ??? | ??? |
Outstanding Shares | ??? | ??? | ??? |
Par Value Per Share | ??? | ??? | ??? |
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