On October 31, the stockholders' equity section of Blossom Company's balance sheet consists of common stock $320,000 and retained earnings $390,000. Blossom. considering the following two courses of action: (1) Declaring a 5% stock dividend on the 80,000 $4 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share. The current market price is $13 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Blossom Company's Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity $ Outstanding shares $ $ $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On October 31, the stockholders' equity section of Blossom Company's balance sheet consists of common stock $320,000 and retained earnings $390,000. Blossom
considering the following two courses of action:
(1) Declaring a 5% stock dividend on the 80,000 $4 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share.
The current market price is $13 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.
Blossom Company's
Balance Sheet
Before Action After Stock Dividend After Stock Split
Stockholders' equity
Paid-in capital
Retained earnings
Total stockholders' equity $
Outstanding shares
$
$
$
$
Transcribed Image Text:On October 31, the stockholders' equity section of Blossom Company's balance sheet consists of common stock $320,000 and retained earnings $390,000. Blossom considering the following two courses of action: (1) Declaring a 5% stock dividend on the 80,000 $4 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share. The current market price is $13 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Blossom Company's Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity $ Outstanding shares $ $ $ $
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