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Ivanhoe Company has had 4 years of record earnings. Due to this success, the market price of its 515,000 shares of $2 par value common stock has increased from $15 per share to $52. During this period, paid-in capital remained the same at $3,090,000. Retained earnings increased from $2,317,500 to $15,450,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders equity, and (c) par value per share. (a)

1.		Stock dividend - retained earnings		$enter a dollar amount
2.		2-for-1 stock split - retained earnings		$enter a dollar amount

(b)

Ivanhoe Company
		Original Balance		After Dividend		After Split
Paid-in capital		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Retained earnings		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total stockholders equity		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Shares outstanding		enter a number of shares		enter a number of shares		enter a number of shares

(c)

1.		Stock dividend - par value per share		$enter a dollar amount
2.		2-for-1 stock split - par value per share		$enter a dollar amount

1. Stock dividend - retained earnings $ 2. 2-for-1 stock split - retained earnings $ (b) Ivanhoe Company Original Balance After Dividend After Split Paid-in capital $ Retained earnings Total stockholder's equity $ Shares outstanding 1. Stock dividend - par value per share $ 2. 2-for-1 stock split - par value per share $

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