Squash Delight Inc. has the following balance sheet:

AssetsCash$55,000Accounts receivable275,000Fixed assets870,000Total assets$1,200,000LiabilitiesAccounts payable$250,000Notes payable58,000Common stock (100,000 shares @ $2 par)200,000Capital in excess of par100,000Retained earnings592,000Total liabilities & owners' equity$1,200,000

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 partb, do 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