The condensed statement of financial position of Erickson Corporation reports the following amounts:

The common shares are currently trading for $15 per share. Erickson wants to assess the impact of three possible alternatives on the corporation and its shareholders:
1. Payment of a $1 per share cash dividend
2. Distribution of a 5% stock dividend
3. A 2-for-1 stock split
Instructions
(a) Determine the impact of each alternative on
(1) Assets,
(2) Liabilities,
(3) Common shares,
(4) Retained earnings,
(5) Total shareholders' equity,
(6) The number of shares.
(b) Identify the advantages and disadvantages of each alternative for the company.

Transcribed Image Text:

ERICKSON CORPORATION Statement of Financial Position (partial) January 31, 2015 Total assets Total liabılitles Shareholders equity $9,000,000 $2,500,000 Common shares, unlimited number authorized, 500,000 1ssued Retalned earnings $3,000,000 900,000 6,500,000 $9,000,000 Total liablities and shareholders equity