Prepare tabular summary of effects of the alternative action

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Question - On October 31, the stockholders' equity section of Wildhorse Co.'s balance sheet consists of common stock $720,000 and retained earnings $400,000. Wildhorse is considering the following two courses of action:

(1) Declaring a 5% stock dividend on the 90,000 $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 $18 per share.

Required - Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.

Reference no: EM133176506

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