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The common shares of Hoover Inc. are currently selling at $143 per share. The directors want to reduce the share

Question:

The common shares of Hoover Inc. are currently selling at $143 per share. The directors want to reduce the share price and increase the share volume before making a new issue. The per share carrying value is $34. There are currently 1 million shares issued and outstanding.

Instructions
(a) Prepare the necessary journal entries assuming that:

1. The board votes a 2-for-1 stock split.
2. The board votes a 100% stock dividend.

(b) Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.

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a Journal Entries for a 2 for 1 Stock Split and a 100 Stock Dividend 2 for 1 Stock Split A 2 for 1 stock split means that for each existing share shareholders will receive two new shares with a reduce…View the full answer


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Related Book For  answer-question
Intermediate Accounting

Intermediate Accounting

ISBN: 978-1119048541

11th Canadian edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

See More Books
Question Details
Chapter # 3
Section: Exercises
Problem: 9
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Question Posted: September 04, 2023 06:14:49
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