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Unformatted text preview: Common stock account $250,000 $312,500 $250,000 Par per share $5 $5 $ 4.00 Shares outstanding #50,000 #62,500 # 62,500 Capital in excess of par $ 300,000 $ 300,000 $ 300,000 Retained earnings $ 450,000 $ 387,500 $ 450,000 Total stockholders equity $1,000,000 $1,000,000 $1,000,000 Comments: Neither the stock dividend nor stock split changed total stockholders equity because neither involved the disbursement of assets. The stock dividend capitalized retained earnings and increased contributed capital by the same amount; it increased shares outstanding but did not change par value per share. The stock split did not change any account balances; its only effects were to (1) increase shares outstanding and (2) decrease par value per share....
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This note was uploaded on 11/22/2009 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08