Mgmt 200 Assignment Soln 4-8-11

Mgmt 200 Assignment Soln 4-8-11 - lower the trading price...

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Management 200 – Introductory Financial Accounting– Spring 2011 Krannert School of Management - Purdue University Solutions to class assignment for April 8, 2011 Problem 10-3A Requirement 1 Before After 100% Stock Dividend After 2-for-1 Stock Split Common stock, $1 par value $ 1,000 $ 2,000 $ 1,000 Additional paid-in capital 49,000 49,000 49,000 Total paid-in capital 50,000 51,000 50,000 Retained Earnings 22,850 21,850 22,850 Total stockholders’ equity $72,850 $72,850 $72,850 Shares outstanding 1,000 2,000 2,000 Par value per share $1.00 $1.00 $0.50 Share price $110 $55 $55 Requirement 2 The primary reason companies declare a large stock dividend or a stock split is to
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Unformatted text preview: lower the trading price of the stock to a more acceptable trading range, making it attractive to a larger number of potential investors. Exercise 10-10 Power Drive Corportation Balance Sheet (Stockholders Equity Section) December 31, 2012 Stockholders equity: Common stock, $1.00 par value $ 155,000 Additional paid-in capital 7,317,500 Total paid-in capital 7,472,500 Retained earnings 2,375,000 * Treasury stock, 2,500 shares (137,500) Total stockholders equity $9,710,000 * $2,000,000+$600,000-$225,000...
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This note was uploaded on 02/27/2012 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.

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