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Unformatted text preview: • Stock dividends and stock splits: o Dividends always reduce RE: Cash and stock o Capitalization of RE: o Stock split: No entry required Increase number of shares and decrease par value o Small stock dividend: Transfer market value of stock from RE to capital stock o Large stock dividend: Will affect market price of stock (go down) Transfer par value of stock from RE to capital stock account o Example: Co. has 400,000 shares C/S w/ $1 par and $20 market value…...
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This note was uploaded on 06/10/2011 for the course BUSI 407 taught by Professor Bowen during the Spring '11 term at UNC.
- Spring '11