ACCT 607

Applied Case Assignment #

7

(Chapter

1

0, 11

)

Continued

Part I

I: Under Armour, Inc.

(NYSE: UA; Baltimore, MD)

4.

Incorporated in Maryland in 1996,

Under Armour, I

nc.

describes itself as

develop

ing

, market

ing

and

distribut

ing

branded performance apparel, footw

ear and

accessories for men, women and youth.

O

n June 15, 2015, Under Armour

announced the

creation of a new class of non

-

voting common

stock, the Class C common stock. The press

release stated that:

Under Armour expects to issue Class C stock through a stock dividend to all existing holders of Under

Armour's

Class A and Class B common stock, which will have the same effect as a two

-

for

-

one stock

split. Each holder of a share of Class A or Class B stock will receive one share of the new Class C stock.

Do you agree or disagree that the effect of the Class C st

ock dividend will be the same as a two

-

for

-

one stock split? As an example, assume the transaction would have occurred on January 1, 2015. On

the basis of the information on Under Armours Consolidated Balance Sheet for December 31, 2014

(excerpted and pr

esented

o

n the next page

of this assignment), what journal entry would be required

to record (a) a two

-

for

-

one stock split, and (b) the Class C stock dividend?

(a)

T

wo

-

for

-

one stock split

:

(b)

Class C stock dividend

:

Do you agree or disagree that the effect of the Class C st

ock dividend will be the same as a two

-

for

-