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

Question:

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.

Distribution
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A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...