Chapter 11, Problem 11.11E

To determine

Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in the form of additional shares rather than cash. Stock dividends are paid, when there is inadequate cash available in the company.

Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing the market price of each share, however, keeping the corporation’s total market value constant.

To prepare: a tabular summary of the before and after effects of stock dividend issue and stock split on stockholders’ equity and outstanding shares for Company M.

To determine

To prepare: a tabular summary of the before and after effects of stock dividend issue and stock split on outstanding shares for Company M.