. Payton Inc. has recently issued a 10% stock dividend to its existing stockholders. As a result of the issuance of the stock dividend the market price of the stock declined 25%. Payton has requested your assistance as to treating this stock dividend as a stock split. Would this be acceptable under GAAP?

a) Provide responses on the appropriate accounting treatment.

b) Support your responses with code sections from the FASB Accounting Standards Codification (ASC)