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.

Exercise 14-4 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 Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Common stock In excess of par Total paid-in capital Retained earnings Total stockholders' equity s Outstanding shares Par value per share