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Squash Delight Inc. has the following balance sheet: $ 35,000 267,000 796,000 $1,098,000 Assets Cash Accounts receivable Fixed assets Total assets Liabilities Accounts payable Notes
Squash Delight Inc. has the following balance sheet: $ 35,000 267,000 796,000 $1,098,000 Assets Cash Accounts receivable Fixed assets Total assets Liabilities Accounts payable Notes payable Common stock (100,000 shares @ $2 par) Capital in excess of par Retained earnings Total liabilities & owners' equity $ 344,000 52,000 200,000 100,000 402,000 $1,098,000 The firm's stock sells for $11 a share. a. Show the effect on the capital accounts of a two-for-one stock split. (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 $ 200,000 100,000 $ 402,000 702,000 b. Show the effect on the capital accounts of a 10 percent stock dividend. Part b is separate from part a. In part b, do not assume the stock split has taken place. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) Effect of Stock Dividend Common stock Capital excess of par Retained earnings Total equity $ 0
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