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Carla Vista Co has had 4 years of record earnings, Due to this success, the market price of its 470,000 shares of $4 par value
Carla Vista Co has had 4 years of record earnings, Due to this success, the market price of its 470,000 shares of $4 par value common stock has increased from $15 per share to $54. During this period, pald-in capital remained the same at $5,640,000. Retained earnings increased from $4,230,000 to $28,200,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings. (b) total stockholders equity, and (c) par value per share. (a) 1. Stock dividend -retained earnings $ 2 2.for 1 stock split-retained earnings $ (b) Carla Vista Co. After Dividend Original Balance After Split Pald-in capital $ Retained earnings Total stockholder's equity $ $ Shares outstanding (c) 1 Stock dividend - par value per share $ 2 2-for-1 stock split-par value per share $
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