Current Attempt in Progress On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $696,000 and retained earnings $397,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on the 87,000, $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Stockholders' equity Before Action After Stock Dividend Paid-in capital $ $ $ Retained earnings Total stockholders' equity $ $ $ After Stock Split
Current Attempt in Progress On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $696,000 and retained earnings $397,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on the 87,000, $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Stockholders' equity Before Action After Stock Dividend Paid-in capital $ $ $ Retained earnings Total stockholders' equity $ $ $ After Stock Split
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Current Attempt in Progress
On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $696,000 and
retained earnings $397,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on
the 87,000, $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current
market price is $15 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.
Stockholders' equity
Paid-in capital
Retained earnings
Total stockholders' equity
Outstanding shares
$
Before Action
$
After Stock Dividend
$
$
$
After Stock Split](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2537e9c9-7ca1-4870-b6ec-07c0c75c0736%2F1d1396bb-4d40-4e7e-96ba-360cac7ab5af%2Fuf8i52o_processed.png&w=3840&q=75)
Transcribed Image Text:Current Attempt in Progress
On October 31, the stockholders' equity section of Sunland Company's balance sheet consists of common stock $696,000 and
retained earnings $397,000. Sunland is considering the following two courses of action: (1) declaring a 5% stock dividend on
the 87,000, $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current
market price is $15 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.
Stockholders' equity
Paid-in capital
Retained earnings
Total stockholders' equity
Outstanding shares
$
Before Action
$
After Stock Dividend
$
$
$
After Stock Split
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