WK 2 Individual Assignment upload

WK 2 Individual Assignment upload - E15-13 (Stock Split and...

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E15-13 (Stock Split and Stock Dividend) (LO 8) The common stock of Alexander Hamilton Inc. is currently selling at $120 per share The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding Insturctions: Prepare the necessary journal entries assuming the following: A) The board votes a 2-for-1 stock split No journal entry will be needed to record the stock split however " there should be a memorandum note to indicate the charge pre value of the shares and the increase number of shares". B) The borad votes a 100% stock dividend Retained Earnings ($10 x 9,000,000) 90,000,000 Common Stock Dividend Distributable 90,000,000 Common Stock Dividend Distributable 90,000,000 Common Stock 90,000,000 C) Briefly discuss the accounting and securities market differenencs between these two methods of increasing the number of shares outstanding Stock dividend altruhoug it increase the number of shares outstanding does not decrease the par value, thus it increase the total par value of outstanding shares Whenever corporation issue additional shares for the purpose of reducing the unit market parice, then the distribution more closely resembles a stock split than a stock dividend.
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E15-18 (Dividends and Stockholders Equity Section) (LO, 4,7,8) Anne Cleves Company reported the following amounts in the stockholders equity section of its Dec 31,2006 balance sheet:
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This note was uploaded on 01/14/2012 for the course ACCOUNTING ACC 423 taught by Professor Hannah during the Spring '09 term at University of Phoenix.

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WK 2 Individual Assignment upload - E15-13 (Stock Split and...

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