Accounting for stock splits and dividendsthe addington book

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Reference no: EM13381186

Accounting for Stock Splits and Dividends

The Addington Book Company has the following equity position. The stock is currently selling for $3 per share.

common Stock (8 million shares outstanding, $3 par)	16,000,000
Paid in excess	4,000,000
Retained earnings	12,000,000
Total common equity	32,000,000
Book value per share	$4.00

a. What was the average price at which the company originally sold its stock?

b. Reconstruct the equity statement above to reflect a four for one stock spit.

c. Reconstruct the statement to reflect a 12.5% stock dividend.

Reference no: EM13381186

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