8 E15-13 (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding. Instructions Prepare the necessary journal entries assuming the following. (a) The board votes a 2-for-1 stock split. (b) The board votes a 100% stock dividend. (c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
8 E15-13 (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding. Instructions Prepare the necessary journal entries assuming the following. (a) The board votes a 2-for-1 stock split. (b) The board votes a 100% stock dividend. (c) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:8 E15-13 (Stock Split and Stock Dividend) The common stock of Alexander Hamilton Inc. is currently
selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a
new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and
outstanding.
Instructions
nolto viis
Prepare the necessary journal entries assuming the following.
(a) The board votes a 2-for-1 stock split.
(b) The board votes a 100% stock dividend.
(c) Briefly discuss the accounting and securities market differences between these two methods of
increasing the number of shares outstanding.
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