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On October 31, the stockholders equity section of Manolo Companys balance sheet consists of common stock $648,000 and retained earnings $400,000. Manolo is considering the

On October 31, the stockholders equity section of Manolo Companys balance sheet consists of common stock $648,000 and retained earnings $400,000. Manolo is considering the following two courses of action:

(1) Declaring a 5% stock dividend on the 81,000 $8 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $4 per share.

The current market price is $17 per share. Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares.image text in transcribed

Manolo Company's Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity Outstanding shares

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