1. Squash Delight, Inc. has the following capital section in its balance sheet.Show the effect on the capital account(s) of a two-for-one stock split.

Common stock (50,000 shares at $2 par).................. $100,000

Capital in excess of par............................................. 200,000

Retained earnings...................................................... 500,000

$800,000

2. Prime Bankcorp has issued rights to its shareholders. The subscription price is $50 and five rights are needed along with the subscription price to buy one of the new shares. The stock is selling for $59 rights-on. What would be the value of one right?If the stock goes ex-rights, what would the new stock price be?