Required informationProblem 10-3A Indicate effect of stock dividends and stock splits (LO10-6)[The following information applies to the questions displayed below.]Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split.Problem 10-3A Part 1Required:1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equityaccounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.)After 100%StockAfter 2-for-1BeforeStock SplitDividendCommon stock, $1 par value$ 1,200Additional paid-in capitalE Total paid-in capitalRetained earnings54,00055,20023,350Total stockholders' equity$ 78,550Shares outstandingPar value per shareShare price1,200$1.00$120

Under stock dividend mechanism, dividend payment is made to shareholders in shares rather than as…

Sammy's Sportshops 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.

Sammy's Sportshops 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.

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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