Stevenson Enterprises is considering the following items: 1. The company may declare a 10 percent stock dividend, issuing an additional share of com¬ mon stock for every 10 shares outstanding; the common stock is currently selling for $25 per share. 2. The company may issue a 2:1 stock split. Prior to these events, Stevenson Enterprises reports the following: Common stock ($6 par value, 650,000 shares authorized, 70,000 issued, 60,000 outstanding, and 10,000 held as treasury stock) $ 420,000 Additional paid-in capital (C/S) 525,000 Retained earnings 695,000 Less: Treasury stock 100,000 Total stockholders’ equity $1,540,000 REQUIRED:

a. Assume that Stevenson Enterprises declares the stock dividend but not the stock split. Prepare the necessary journal entry. Prepare the stockholders’ equity section of the balance sheet to reflect the stock dividend.

b. Assume that Stevenson Enterprises declares the stock split but not the stock dividend. Prepare the stockholders’ equity section of the balance sheet to reflect the stock split.

c. Assume that Stevenson Enterprises declares the stock dividend and then the stock split. Prepare the necessary journal entries. Prepare the stockholders’ equity section of the bal¬ ance sheet to reflect both actions.

d. Assume that Stevenson Enterprises declares the stock split and then the stock dividend. Prepare the necessary journal entries. Prepare the stockholders’ equity section of the bal¬ ance sheet to reflect both actions. Assume that the market price of Stevenson’s stock drops to $12.50 per share following the stock split.