On October 31, the stockholders' equity section of Crane Company's balance sheet consists of common stock $648,000 and retained earnings $391,000. Crane is considering the following two courses of action (1) Declaring a 6% stock dividend on the 81,000 $8 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $4 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. Crane Company's Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity s Dutstanding shares
On October 31, the stockholders' equity section of Crane Company's balance sheet consists of common stock $648,000 and retained earnings $391,000. Crane is considering the following two courses of action (1) Declaring a 6% stock dividend on the 81,000 $8 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $4 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. Crane Company's Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders' equity Paid-in capital Retained earnings Total stockholders' equity s Dutstanding shares
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Make a tabular summary of the effects (check pic)
Transcribed Image Text:On October 31, the stockholders' equity section of Crane Company's balance sheet consists of common stock $648,000 and retained earnings $391,000. Crane is considering the following two courses of action
(1) Declaring a 6% stock dividend on the 81,000 $8 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $4 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.
Crane Company's
Balance Sheet
Before Action After Stock Dividend After Stock Split
Stockholders' equity
Paid-in capital
Retained earnings
Total stockholders' equity s
Outstanding shares
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