Q14. Squash Delight

Please offer a detailed explanation of how to work the problem, along with the answer. Thank you.

Squash Delight Incorporated has the following balance sheet: Assets Cash Accounts receivable Fixed assets Total assets Accounts payable Notes payable Liabilities Common stock (100,000 shares @ $2 par) Capital in excess of par Retained earnings Total liabilities & owners' equity The firm's stock sells for $9 a share. $ 65,000 333,000 930,000 $ 1,328,000 $ 252,000 57,000 200,000 100,000 719,000 $ 1,328,000 a. Show the effect on the capital accounts of a two-for-one stock split. Note: Do not round Intermediate calculations and round your answers to the nearest whole dollar. Common stock Capital excess of par Retained earnings Total equity Effect of Stock Split $ 0 b. Show the effect on the capital accounts of a 10 percent stock dividend. Part bis separate from part a. In part b, do not assume the stock split has taken place. Note: Do not round intermediate calculations and round your answers to the nearest whole dollar. Common stock Capital excess of par Retained earnings Total equity Effect of Stock Dividend $ 0 c. Based on the balance in retained earnings, which of the two dividend plans is more restrictive on future cash dividends? Stock dividend Stock split