Chapter 11, Problem 14E

Comparing 100 percent Stock Dividend and 2-for-1 Split

On July 1, Jones Corporation had the following capital structure:

Common Stock, par $1; 8,000,000 authorized shares, 100,000 issued and outstanding		$100,000
Additional Paid-in Capital		90,000
Retained Earnings		170,000
Treasury Stock		None

Required:

Complete the following table based on two independent cases involving stock transactions:

Case 1:	The board of directors declared and issued a 100 percent stock dividend when the stock price was $8 per share.
Case 2:	The board of directors voted a 2-for-1 stock split. The stock price prior to the split was $8 per share.