Problem 10-3A (Algo) Indicate effect of stock dividends and stock splits (LO10-6) Big Meadows Sports has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. 2. State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading price of the stock to a more acceptable trading range, making it attractive to a larger number of potential investors." is true or false. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)
Problem 10-3A (Algo) Indicate effect of stock dividends and stock splits (LO10-6) Big Meadows Sports has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. 2. State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading price of the stock to a more acceptable trading range, making it attractive to a larger number of potential investors." is true or false. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 10-3A (Algo) Indicate effect of stock dividends and stock splits (LO10-6)
Big Meadows Sports has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share.
The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split.
Required:
1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity
accounts, shares outstanding, par value, and share price.
2. State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading
price of the stock to a more acceptable trading range, making it attractive to a larger number of potential investors." is true or false.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders'
equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)
Common stock, $1 par value
Additional paid-in capital
Total paid-in capital
Retained earnings
Total stockholders' equity
Shares outstanding
Par value per share
Share price
Before
After 100%
Stock
Dividend
$ 1,200
51,000
52,200
23,050
$ 75,250 $
1,200
$ 1.00
$
114
0
Required 2
After 2-for-1
Stock Split
0 $
0
0
Required 1
Required 2 >
Problem 10-3A (Algo) Indicate effect of stock dividends and stock splits (LO10-6)
Big Meadows Sports has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share.
The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split.
Required:
1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity
accounts, shares outstanding, par value, and share price.
2. State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading
price of the stock to a more acceptable trading range, making it attractive to a larger number of potential investors." is true or false.
Complete this question by entering your answers in the tabs below.
Required 1
State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading price of the
stock to a more acceptable trading range, making it attractive to a larger number of potential investors." is true or false.
State whether the statement "The primary reason companies declare a large stock dividend or a stock split is to lower the trading price of
the stock to a more acceptable trading range, making it attractive to a larger number of potential investors.
< Required 1
Required 2 >
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