Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Sipacore make its decision by completing the following chart (treat each possibility independently): Total assets (1) Before Action After Cash Dividend $1,196,000 $ 1,146,000 $ (2) After Stock Dividend 1,196,000 $ Total liabilities $243,000 $ 243,000 $ 243,000 $ Shareholders' equity Common shares 647,000 647,000 710,000 Retained earnings 306,000 256,000 306,000 Total shareholders' equity 953,000 903,000 953,000 Total liabilities and shareholders' equity $1,196,000 $ 1,146,000 $ 1,196,000 $ Number of common shares 100,000 100,000 105,000

Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Sipacore make its decision by completing the following chart (treat each possibility independently): Total assets (1) Before Action After Cash Dividend $1,196,000 $ 1,146,000 $ (2) After Stock Dividend 1,196,000 $ Total liabilities $243,000 $ 243,000 $ 243,000 $ Shareholders' equity Common shares 647,000 647,000 710,000 Retained earnings 306,000 256,000 306,000 Total shareholders' equity 953,000 903,000 953,000 Total liabilities and shareholders' equity $1,196,000 $ 1,146,000 $ 1,196,000 $ Number of common shares 100,000 100,000 105,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 66P

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Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.4 cash dividend, (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share.Help Sipacore make its decision by completing the following chart (treat each possibility independently): Before Action After CashDividend After StockDividend AfterStock Split Total assets $1,372,000 $enter a total amount for the first part $enter a total amount for the first part $enter a total amount for the first part Total liabilities $266,000 $enter a total amount for section one of the second part $enter a total amount for section one of the second part $enter a total amount for section one of the second part Shareholders’ equity Common shares 645,000 enter a dollar amount enter a dollar amount enter a dollar amount Retained earnings 461,000 enter a dollar amount…
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