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On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings $897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $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 $16 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. After After Before Stock Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock 335,000 355,100 2$ 335,000 In excess of par 12,060 Total paid-in capital 335,000 368,160 335,000 Retained earnings 897,000 864,840 897,000 Total stockholders' 2$ 1,232,000 2$ 1,232,000 2$ 1,232,000 equity Outstanding shares 33,500 35,510 67,000 Par value per share 10 10 %24 %24 %24

On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings $897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $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 $16 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. After After Before Stock Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock 335,000 355,100 2$ 335,000 In excess of par 12,060 Total paid-in capital 335,000 368,160 335,000 Retained earnings 897,000 864,840 897,000 Total stockholders' 2$ 1,232,000 2$ 1,232,000 2$ 1,232,000 equity Outstanding shares 33,500 35,510 67,000 Par value per share 10 10 %24 %24 %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question-based on, "tabular summary".

 

I have got the red box outline incorrect. "Total paid".

On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings $897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $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 $16 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. After After Before Stock Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock 2$ 335,000 2$ 355,100 2$ 335,000 In excess of par 12,060 Total paid-in capital 335,000 368,160 335,000 Retained earnings 897,000 864,840 897,000 Total stockholders' $ 1,232,000 2$ 1,232,000 2$ 1,232,000 equity Outstanding shares 33,500 35,510 67,000 Par value per share 10 10 %24
Transcribed Image Text:On October 31, the stockholders' equity section of Sheridan Company consists of common stock $335,000 and retained earnings $897,000. Sheridan is considering the following two courses of action: (1) declaring a 6% stock dividend on the 33,500, $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 $16 per share. Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. After After Before Stock Stock Action Dividend Split Stockholders' equity Paid-in capital Common stock 2$ 335,000 2$ 355,100 2$ 335,000 In excess of par 12,060 Total paid-in capital 335,000 368,160 335,000 Retained earnings 897,000 864,840 897,000 Total stockholders' $ 1,232,000 2$ 1,232,000 2$ 1,232,000 equity Outstanding shares 33,500 35,510 67,000 Par value per share 10 10 %24
Expert Solution
Step 1 Introduction

Stockholder's equity:  It is also known as the balance of assets available to shareholders after payment of all liabilities. Under the stockholder equity Includes Common Stock, Paid-in Capital, Retained Earnings, and Treasury Stock.

Stockholder’s equity = Total assets – Total liabilities

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