Due to five years of record earnings at Sing CD Corporation, the market price of its 500,000 shares of $2 par value common stock tripled from $15 per share to $45. During this period, paid-in capital remained the same at $2,000,000. Retained earnings increased from $1,500,000 to $10,000,000. President Joan Elbert is considering either a 10% stock dividend or a 2-for-1 stock split. She asks you to show the before and after effects of each option on retained earnings.
Due to five years of record earnings at Sing CD Corporation, the market price of its 500,000 shares of $2 par value common stock tripled from $15 per share to $45. During this period, paid-in capital remained the same at $2,000,000. Retained earnings increased from $1,500,000 to $10,000,000. President Joan Elbert is considering either a 10% stock dividend or a 2-for-1 stock split. She asks you to show the before and after effects of each option on retained earnings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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show the before and after effects of each option on retained earnings .
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Due to five years of record earnings at Sing CD Corporation, the market price of its 500,000 shares of $2 par value common stock tripled from $15 per share to $45. During this period, paid-in capital remained the same at $2,000,000. Retained earnings increased from $1,500,000 to $10,000,000. President Joan Elbert is considering either a 10% stock dividend or a 2-for-1 stock split. She asks you to show the before and after effects of each option on retained earnings.
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