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# On October 31, the stockholders' equity section of Pele Company's balance sheet consists of common stock \$790,400 and retained earnings \$445,100.

On October 31, the stockholders’ equity section of Pele Company’s balance sheet consists of common stock \$790,400 and retained earnings \$445,100.

Pele is considering the following two courses of action:

 (1) Declaring a 7% stock dividend on the 98,800 \$8 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to \$4 per share.

The current market price is \$17 per share.

Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares

Solution Account Before After stock dividend After... View the full answer

• After stock dividend SE = 98800*7%*17+790400, Ost shares = 98800+98800*7%
• akansha.malhotra3110
• Apr 11, 2016 at 9:44pm
• its telling me some of it wrong i have screen shot it and i cant figure out how to show you
• bcbt86404
• Apr 11, 2016 at 9:52pm
• Can you tell me what is wrong, will recify it
• akansha.malhotra3110
• Apr 11, 2016 at 10:23pm
• retained earnings after stock dividend total stock equity after stock dividend and outstanding shares after stock split
• bcbt86404
• Apr 11, 2016 at 10:27pm
• ok
• akansha.malhotra3110
• Apr 11, 2016 at 10:28pm
• Before action Before Action Paid in capital 790400 Retained Earnings 445100 Total shareholders equity 1235500 Outstanding shares 98800
• akansha.malhotra3110
• Apr 11, 2016 at 10:54pm
• after stock Dividend Paid in capital 907972 Retained Earnings 327528 Total shareholders equity 1235500 Outstanding shares 105716
• akansha.malhotra3110
• Apr 11, 2016 at 10:55pm
• After stock split Paid in capital 790400 Retained Earnings 445100 Total shareholders equity 1235500 Outstanding shares 197600
• akansha.malhotra3110
• Apr 11, 2016 at 10:55pm
• Hope this helps
• akansha.malhotra3110
• Apr 11, 2016 at 10:55pm
• thank you so much
• bcbt86404
• Apr 11, 2016 at 11:03pm
• Welcome
• akansha.malhotra3110
• Apr 11, 2016 at 11:04pm

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