On October 31, the stockholders equity section of Heins Company consists of common stock $260,000 and retained earnings $882,000. Heins is considering the following two courses of action: (1) declaring a 4% stock dividend on the 26,000, $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 $16 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 14-4 Your answer is partially correct. Try again. On October 31, the stockholders' equity section of Heins Company consists of common stock $260,000 and retained earnings $882,000. Hein is considering the following two courses of action: (1) declaring a 4% stock dividend on the 26,000, $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 $16 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 After Before Stock Stock Action Dividend Split Stockholders' equity Paid-in capital 20800 260,000 260,000 Common stock In excess of par Total paid-in capital 260,000 260,000 Retained earnings 882,000 882,000 1142000 1142000 $ 1142000 Total stockholders' equity 26,000 Outstanding shares 10 5 10 Par value per share $ LINK TO TEXT