In the past year, Cormier Corporation declared a 10% stock dividend, and Fegan, Inc. announced a 2-for-1 stock split. Your parents own 100 shares of each company’s $50 par value common stock. During a recent phone call, your parents ask you, as an accounting student, to explain the differences between the two events. Instructions Write a letter to your parents that explains the effects of the two events to them as stockholders and the effects of each event on the financial statements of each corporation.
In the past year, Cormier Corporation declared a 10% stock dividend, and Fegan, Inc. announced a 2-for-1 stock split. Your parents own 100 shares of each company’s $50 par value common stock. During a recent phone call, your parents ask you, as an accounting student, to explain the differences between the two events. Instructions Write a letter to your parents that explains the effects of the two events to them as stockholders and the effects of each event on the financial statements of each corporation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 3:
In the past year, Cormier Corporation declared a 10% stock dividend, and Fegan, Inc. announced a 2-for-1 stock split.
Your parents own 100 shares of each company’s $50 par value common stock. During a recent phone call, your parents
ask you, as an accounting student, to explain the differences between the two events.
Instructions
Write a letter to your parents that explains the effects of the two events to them as stockholders and the effects of
each event on the financial statements of each corporation.
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