Required information Problem 8-34 (Algo) Comprehensive problem-calculate missing amounts, issue price, net income, and dividends; interpret stock dividend and split LO 8-1, 8-2, 8-3,8-4, 8-6, 8-7 [The following information applies to the questions displayed below.] Bacon Incorporated has the following stockholders' equity section in its May 31, 2022, comparative balance sheets: Paid-in capital: Preferred stock, $140 par value, 8%, cumulative, 100,000 shares authorized, 70,000 shares issued and outstanding Common stock, $8 par value, 600,000 shares authorized, 400,000 and 380,000 shares issued, respectively May 31, 2022 April 30, 2022 $9,800,000 $ 9,800,000 7 3,040,000 Additional paid-in capital Retained earnings 14,650,000 12,050,000 14,100,000 11,774,000 Less: Treasury common stock, at cost; 19,000 shares and 18,000 shares, respectively (1,748,000) (1,728,000) Total stockholders' equity $ 7 $36,986,000 Problem 8-34 (Algo) Part f - Horizontal Model f-1. Assume that on June 1 the market value of the common stock was $40 per share and that the board of directors declared a 6% stock dividend on the issued shares of common stock. Use the horizontal model to show the issuance of the stock dividend. Indicate the financial statement effect. Note: Enter decreases with a minus sign to indicate a negative financial statement effect. Assets Balance Sheet Liabilities Common stock Stockholders' Equity +Additional paid-in capital +Retained earnings 10 Problem 8-34 (Algo) Part f-Journal entry f-2. Assume that on June 1 the market value of the common stock was $40 per share and that the board of directors declared a 6% stock dividend on the issued shares of common stock. Prepare journal entry to show the issuance of the stock dividend Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list G Journal entry worksheet 1 Record the declaration of 6% stock dividend. Note: Enter debits before credits Transaction General Journal Debit Credit 9 > Problem 8-34 (Algo) Part g g. Assume that instead of the stock dividend described in f, the board of directors authorized a 2-for-1 stock split on June 1 when the market price of the common stock was $40 per share. 1 1. What will be the par value, and how many shares of common stock will be authorized after the split? 2. What will be the market price per share of common stock after the split? 3. How many shares of common stock will be in the treasury after the split? Par value 1 Number of shares 2 Market price 3. Number of shares Problem 8-34 (Algo) Part h h. What is the effect on total stockholders' equity as a result of 1. The stock dividend described in part f? 2. The stock split described in part g? 1. Total stockholders' equity will 2. Total stockholders' equity will