On October 31, the stockholders' equity section of Concord Corporation's balance sheet consists of common stock $801,000 and retained earnings $927,000. Concord is considering the following two courses of action: (1) declaring a 4% stock dividend on the 80,100 $10 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $16 per share.

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 Concord Corporation's balance sheet consists of common stock $801,000 and
retained earnings $927,000. Concord is considering the following two courses of action: (1) declaring a 4% stock dividend on
the 80,100 $10 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current
market price is $16 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.
Before
Action
After
Stock
Dividend
After
Stock
Split
Stockholders' equity
Paid-in capital
Retained earnings
Attempts: unlimited Submit Answer
Total stockholders' equity
Outstanding shares
eTextbook and Media
Solution
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Transcribed Image Text:Show Attempt History Current Attempt in Progress * Your answer is incorrect. On October 31, the stockholders' equity section of Concord Corporation's balance sheet consists of common stock $801,000 and retained earnings $927,000. Concord is considering the following two courses of action: (1) declaring a 4% stock dividend on the 80,100 $10 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $16 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Attempts: unlimited Submit Answer Total stockholders' equity Outstanding shares eTextbook and Media Solution Save for Later LA $ LA $ $
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