Adobe Systems develops and markets computer software including Adobe Acrobat that enables users to access information across all print and electronic media. A recent news article contained the following information:

Required: 1. Prepare any journal entries that Adobe should make as the result of information in the preceding report. Assume that the company has 1 million shares outstanding, the par value is S0.50 per share, and the market value is $40 per share. 2. What do you think happened to the company's stock price after the September 16 announcement

? 3. What factors did the board of directors consider in making this decision?

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September 16, 1999 Adobe Systems reported record revenue and operating profit for the third quarter of fiscal 1999. The Board of Directors announced a 100% stock dividend will occur on October 26, 1999 for stockholders of record on October 4. 1999. The Board also declared this quarter's cash dividend of $0.05 per share, payable on October 12. 1999 to stockholders of record as of September 28, 1999.