Question
Use the following information for all questions related to Giacomo Company: Giacomo Company manufactures outdoor tables and chairs for European-style cafes. On January 1st, Year
Use the following information for all questions related to Giacomo Company: Giacomo Company manufactures outdoor tables and chairs for European-style cafes. On January 1st, Year 1, Giacomo issues 500,000 shares of $2 par value common stock for $10 per share. This is the first time Giacomo has issued common stock. Giacomo does not issue any other stock during Year 1.
1. On December 31st, Year 1, Giacomo decides that its stock price is too high, so it declares and distributes a 75% stock dividend on all outstanding shares. Giacomo's common stock is trading for $12 per share on December 31st, Year 1.
Answer the following question related to the journal entry Giacomo will make on December 31st, Year 1 to record this stock dividend. If an account listed is not impacted, put "0". If there is no journal entry to record this transaction, put "0" for all listed options.
There will be a...
- Debit to Retained Earnings for
- Credit to Common Stock for
- Credit to Additional Paid-In Capital for
2.
Instead, assume Giacomo decides to execute an 9:3 stock split. What will be the new par value of Giacomo's stock? Round your final answer to the nearest two decimal places.
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