On october 31 the stockholders equity section of pele

Reference no: EM13570650

On October 31, the stockholders' equity section of Pele Company's balance sheet consists of common stock $648,000 and retained earnings $400,000.

Pele is considering the following two courses of action:

(1)		Declaring a 5% stock dividend on the 81,000 $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.

Pele Company's Balance Sheet
	Before Action	After Stock Dividend	After Stock Split
Stockholders' equity
Paid-in capital	$	$	$
Retained earnings
Total stockholders' equity	$	$	$
Outstanding shares

Reference no: EM13570650

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