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The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $4 per share. Common stock (65,000
The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $4 per share.
Common stock (65,000 shares) | $130,000 |
Retained earnings | 250,000 |
$380,000 | |
The firm intends to first declare a 10 percent stock dividend and then pay a $0.20 cash dividend (which also causes a reduction of retained earnings).
Show the capital section of the balance sheet after the first transaction and then after the second transaction.
Western Pipe Company | |
After 1st transaction | |
Common stock (71,500 shares) | $ |
Retained earnings | |
$ | |
Western Pipe Company | |
After 2nd transaction | |
Common stock (71,500 shares) | $ |
Retained earnings | |
$ |
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