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On October 31, the stockholders equity section of Skysong, Inc.s balance sheet consists of common stock $820,000 and retained earnings $863,000. Skysong is considering the
On October 31, the stockholders equity section of Skysong, Inc.s balance sheet consists of common stock $820,000 and retained earnings $863,000. Skysong is considering the following two courses of action: (1) declaring a 4% stock dividend on the 82,000 $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 $15 per share. Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares.
Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital $ ta $ Retained earnings Total stockholders' equity ta $ Outstanding sharesStep by Step Solution
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