Sheridan Company has had 4 years of record earnings. Due to this success, the market price of its 450,000 shares of $2 par value common stock has increased from $12 per share to $51. During this period, paid-in capital remained the same at $2,700,000. Retained earnings increased from $2,025,000 to $13,500,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders equity, and (c) par value per share.

a) 1. stock dividend - retained earnings $____________

2. 2-for-1 stock split - retained earnings $_____________

b). FIND: Paid in capital, Retained earnings, Total stockholders equity, Shares outstanding for the following....

original balance ______

after dividend ___________

after split __________

c) 1. stock dividend - par value per share $__________

2. 2-for-1 stock split - par value per share $___________