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What will the effect on the common stock account

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Question - Bonobo's Balloons Inc. has four million shares in issue and outstanding. The par value per share is $10 and the market price per share is $30. The firm has a retained earnings balance of $30,000,000 and additional paid-in capital of $5,000,000. The board of directors has decided to do a 20% stock dividend.

Instructions - If the board of directors issues a 20% stock dividend, what will the effect on the common stock account, the par value per share, the retained earnings balance, and additional paid-in capital be after the dividend?

Based on the information provided in the previous question assume the firm instead decided to do a 5-for-4 stock split.

Instructions - What would the effect be on the common stock account, the par value per share, the retained earnings balance, and additional paid-in capital be after the dividend?

Reference no: EM132561575

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