On October 31, the stockholders' equity section of Tamarisk Company's balance sheet consists of common stock $690,000 and retained earnings $483,000. Tamarisk is considering the following two courses of action: (1) declaring and distributing a 10% stock dividend on the 69,000 $10 par value shares outstanding or (2) affecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. (Round book value per share to 2 decimal places, e.g. 15.25.) $ Before Action $ After Stock Dividend $ After Stock Split
On October 31, the stockholders' equity section of Tamarisk Company's balance sheet consists of common stock $690,000 and retained earnings $483,000. Tamarisk is considering the following two courses of action: (1) declaring and distributing a 10% stock dividend on the 69,000 $10 par value shares outstanding or (2) affecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. (Round book value per share to 2 decimal places, e.g. 15.25.) $ Before Action $ After Stock Dividend $ After Stock Split
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On October 31, the stockholders' equity section of Tamarisk Company's balance sheet consists of common stock $690,000 and
retained earnings $483,000. Tamarisk is considering the following two courses of action: (1) declaring and distributing a 10% stock
dividend on the 69,000 $10 par value shares outstanding or (2) affecting a 2-for-1 stock split that will reduce par value to $5 per share.
The current market price is $15 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.
(Round book value per share to 2 decimal places, e.g. 15.25.)
>
<
SA
Before
Action
After
Stock
Dividend
+A
After
Stock
Split
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