UCONN Group has the following items in its current balance sheet:

Common Stock 5,000,000 shares authorized, 1,200,000 issued. $6,000,000

Capital Surplus $3,600,000

Treasury Stock on Common 100,000 shares $1,320,000

Cumulative Preferred Stock 17,000,000 authorized {8%} $2 par $12,000,000

Retained Earnings $30,180,000

1.) If UCONN Group were to provide for a 10% common stock dividend, then how many new shares are to be mailed to existing shareholders?

2.) Assume in question [8] the market price of the common stock was $20 at the time of the stock dividend announcement. What is the journal entry to record the stock dividend?

3.) Explain the concept of the reverse stock split.