Oriole Company has had 4 years of record earnings. Due to this success, the market price of its 435.000 shares of $2 par value common stock has increased from $15 per share to $52. During this period, paid-in capital remained the same at $2,610,000. Retained earnings increased from $3,915,000 to $26,100,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders' equity, and c) par value per share.

(a)

1. Stock dividend - retained earnings

2.

2-for-1 stock split - retained earnings

$

(b)

Original Balances

After Dividend

After Split

Paid-in capital

$

Retained earnings

Total stockholders' equity

$

Shares outstanding

(c)

1. Stock dividend - par value per share

2.

2-for-1 stock split - par value per share