Question

Jurgens Company has had 4 years of net income. Due to this success, the market price of its 400,000 shares of $3 par value common stock has increased from $12 per share to $46. During this period, paid-in capital remained the same at $2,800,000.
Retained earnings increased from $1,800,000 to $12,000,000. President E. Rife is considering either a 15% stock dividend or a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on
(a) Retained earnings
(b) Total stockholders’ equity.



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  • CreatedJanuary 30, 2014
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