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On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $824,000 and retained earnings $877,000. Sunland is considering
On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $824,000 and retained earnings $877,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on the 82,400 $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 company's stockholders' equity and outstanding shares. Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity Outstanding shares Before Action After Stock Dividend $ $ $ After Stock Split
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