Question

On July 1, 2014, Davidson Corporation had the following capital structure:
Common stock (par $1) ... $600,000
Capital in excess of par ... 900,000
Retained earnings ...... 700,000
Treasury stock ........ −0−

Required:
Complete the following comparative tabulation based on two independent cases:
Case 1: The board of directors declared and issued a 50 percent stock dividend when the stock was selling at $12 per share.
Case 2: The board of directors voted a 6-to-5 stock split (i.e., a 20 percent increase in the number of shares). The market price prior to the split was $12 pershare.


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  • CreatedJuly 01, 2014
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