Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. sandhill co. has had 4 years of record earnings. d

Sandhill Co. has had 4 years of record earnings. Due to this success, the market...

60.1K

Verified Solution

Question

Accounting

Sandhill Co. has had 4 years of record earnings. Due to this success, the market price of its 455,000 shares of $4 par value common stock has increased from $14 per share to $54. During this period, paid-in capital remained the same at $5,460,000. Retained earnings increased from $4,095,000 to $27,300,000. 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 $
2. 2-for-1 stock split - retained earnings $

(b)

Sandhill Co.

Original Balance

After Dividend

After Split

Paid-in capital

$

$

Retained earnings

Total stockholders equity

 $ $ $

Shares outstanding

(c)

1. Stock dividend - par value per share $
2. 2-for-1 stock split - par value per share $

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students