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

The common shares are currently trading for $30 per share. Laporte wants to assess the impact of three possible alternatives:
1. Payment of a $1.50 per share cash dividend
2. Distribution of a 5% stock dividend
3. A 3-for-2 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:

LAPORTE CORPORATION Statement of Financlal Position (partial) June 30, 2015 Total assets $16,000,000 Total liabılitles Shareholders equity 6,000,000 Common shares, unlimited number authorized, 400,000 1ssued Retalned earnings $2,000,000 8,000,000 10,000,000 Total liablities and shareholders equity