On October 31, the stockholders equity section of Heins Company consists of common stock $355,000 and retained earnings $901,000. Heins is considering the following two courses of action: (1) declaring a 5% stock dividend on the 35,500, $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.

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Exercise 14-4 Your answer is partially correct. Try again On October 31, the stockholders' equity section of Heins Company consists of common stock $355,000 and retained earnings $901,000. Heins is considering the following two courses of action: (1) declaring a 5% stock dividend on the 35,500, $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 After Stock Split er Before Action Stock Dividend Stockholders' equity Paid-in capital Common stock 355,000 532,500 355,000 In excess of par Total paid-in capital 355,000 901,000 1,256,000 35,500 532,500 723,500 1,256,000 53,250 355,000 901,000 1,256,000 71,000 Retained earnings Total stockholders' equity Outstanding shares Par value per share LINK TO TEXT