(Stock splits) The debt and equity section of the Robson Corporation balance sheet is shownhere:

Debt 2,000,000

Common equity

Par ($1.6, 200,000 shares) 320,000

Paid-in capital 500,000

Retained earnings 950,000

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3,770,000

The current market price of the common shares is $ 16 Reconstruct the financial statement assuming that (a) a 20 percent stock dividend is issued and (b) a 3-for-1 stock split is declared.

a. Reconstruct the financial statement assuming that a 20 percent stock dividend is issued.

Debt

Common equity

Par ($1.6 ; 240,000)

Paid-in capital

Retained earnings

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3770000

b.Reconstruct the financial statement assuming that a 3-for-1 stock split is declared.

Debt

Common equity

Par ($0.53333; 600,000)

Paid-in capital

Retained earnings

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3770000