On October 31, the stockholders' equity section of Crane Company's bala earnings $402,000. Crane is considering the following two courses of action: (1) declaring a 5% stock dividend on the 92,000, $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 $18 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 Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity 736.000 402,000 1.138,000 $ After Stock Split
On October 31, the stockholders' equity section of Crane Company's bala earnings $402,000. Crane is considering the following two courses of action: (1) declaring a 5% stock dividend on the 92,000, $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 $18 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 Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity 736.000 402,000 1.138,000 $ After Stock Split
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:On October 31, the stockholders' equity section of Crane Company's balance sheet consists of common stock $736,000 and retained
earnings $402,000. Crane is considering the following two courses of action: (1) declaring a 5% stock dividend on the 92,000, $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
$18 per share
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares
After Stock Split
Stockholders' equity
Paid-in capital
Retained earnings
Total stockholders' equity $
Outstanding shares
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402,000
1.138,000
92.000
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