Squash Delight Inc. has the following balance sheet:

Assets

Cash $30,000

Accounts receivable350,000

Fixed assets980,000

Total assets $1,360,000

Liabilities

Accounts payable $295,000

Notes payable55,000

Common stock (100,000 shares @ $4 par)400,000

Capital in excess of par100,000

Retained earnings510,000

Total liabilities & owners' equity $1,360,000

The firm's stock sells for $12 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.)

b.Show the effect on the capital accounts of a 10 percent stock dividend. Partbis separate from parta. In partbdo not assume the stock split has taken place.(Do not round intermediate calculations and round your answers to the nearest whole dollar.)

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