Problem 3

Gordon's Meats has 6,500 shares of stock outstanding. The market value is $26.50 per share. The statement of financial position shows $48,200 common stock account, and $142,900 in the retained earnings account. The firm just announced a 5 percent stock dividend. What will the balance be in the common stock and retained earnings accounts after the dividend?

Problem 4

Berk currently has 650,000 shares of stock outstanding that sell for $75 per share. Assuming no market imperfections or tax effects exist, what will the share price and the new number of shares after:

a.Berk has a six-for-four stock split?

b.Berk has a 17 percent stock dividend?

c.Berk has a 38.5 percent stock dividend?

d.Berk has a four-for-six reverse stock split?