Prepare a tabular summary of effects of alternative actions

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On October 31, the stockholders' equity section of Blossom Company consists of common stock $250,000 and retained earnings $850,000. Blossom is considering the following two courses of action: (1) declaring a 4% stock dividend on the 25,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.

Problem 1: Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share.

Reference no: EM132961746

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