Chapter 11, Problem 11.3bDIE

 (a) (1)

To determine

Stock Dividends:  It refers to the payment of the dividend to its shareholders by the corporation in the form of shares rather than cash is referred as stock dividend.

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 Show: the effect of 15% stock dividend issue on retained earnings for Company S before and after stock dividend issue.

 (2)

To determine

To Show: the effect of stock split on retained earnings for Company S before and after stock split.

(b) 1.

To determine

To Show: the effect of 15% stock dividend issue on stockholders’ equity for Company S before and after stock dividend issue.

(2)

To determine

To Show: the effect of stock split on stockholders’ equity for Company S before stock split

To determine

To Show: the effect of stock split on stockholders’ equity for Company S after stock split.

(c) (1)

To determine

To show: the effect of 15% stock dividend on par value per share.

(2)

To determine

To show: the effect of stock split on par value per share.