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On October 31 , the stockholders' equity section of Oriole Company consists of common stock $270,000 and retained earnings $884,000. Oriole is considering the following
On October 31 , the stockholders' equity section of Oriole Company consists of common stock $270,000 and retained earnings $884,000. Oriole is considering the following two courses of action: (1) declaring a 4% stock dividend on the 27,000,$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. \begin{tabular}{lll} & After & After \\ Before & Stock & Stock \\ Action & Dividend & Split \\ \hline \end{tabular} Stockholder' equity Paid-in capital Common stock In excess of par Total paid-in capital Retained earnings Total stockholders' equity $270000 $ 10 884000 $ 270000 $ 270000
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