Problems: Set B 14-1B The condensed balance sheet of Erickson Corporation reports the following: Compare impact of cash dividend, stock dividend, and stock split. (LOI) AP ERICKSON CORPORATION Balance Sheet (partial) January 31, 2017 $9,000,000 $2,500,000 Total assets Liabilities and shareholders' equity Liabilities Shareholders' equity Common shares, unlimited number authorized, 500,000 issued Retained carnings Total liabilities and shareholders' cquity $3,000,000 3,500,000 6,500,000 $9,000,000 The market price of the common shares is currently $30 per share, Erickson wants to assess the impact of three possible alternatives on the corporation and its shareholders. The alternatives are: 1. Payment of a $1.50 per share cash dividend 2. Distribution of a 5% stock dividend 3. A2-for-1 stock split Instructions (a) For each alternative, determine the impact on (1) assets, (2) liabilities, (3) common shares, (4) retained earnings, (5) total shareholders' equity, and (6) the number of shares. (b) Assume an Erickson shareholder currently owns 2,000 common shares at a cost of $50,000. What is the impact of each alternative for the shareholders assuming that the market price of the shares changes proportionately with the alternative? Problems: Set B 14-1B The condensed balance sheet of Erickson Corporation reports the following: Compare impact of cash dividend, stock dividend, and stock split. (LOI) AP ERICKSON CORPORATION Balance Sheet (partial) January 31, 2017 $9,000,000 $2,500,000 Total assets Liabilities and shareholders' equity Liabilities Shareholders' equity Common shares, unlimited number authorized, 500,000 issued Retained carnings Total liabilities and shareholders' cquity $3,000,000 3,500,000 6,500,000 $9,000,000 The market price of the common shares is currently $30 per share, Erickson wants to assess the impact of three possible alternatives on the corporation and its shareholders. The alternatives are: 1. Payment of a $1.50 per share cash dividend 2. Distribution of a 5% stock dividend 3. A2-for-1 stock split Instructions (a) For each alternative, determine the impact on (1) assets, (2) liabilities, (3) common shares, (4) retained earnings, (5) total shareholders' equity, and (6) the number of shares. (b) Assume an Erickson shareholder currently owns 2,000 common shares at a cost of $50,000. What is the impact of each alternative for the shareholders assuming that the market price of the shares changes proportionately with the alternative