Exercise 11 7 Exercise 11 7 Your answer is partially correct Try again On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $513,000and retained earnings $404,800 Pele is considering the following two courses of action (1) Declaring a7 stock dividend on the85,500$6par value shares outstanding (2) Effecting a 2 for 1 stock split that will reduce par value to $3per share The current market price is $18per share Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares Pele Companys Balance Sheet Before Action After Stock Dividend After Stock Split Stockholders equity Paid in capital $ 513000 $ $ 513000 Retained earnings 404800 404800 Total stockholders equity $ 917800 $ 917800 $ 917800 Outstanding shares 85500 Warning Don't show me this message again for the assignment Ok Cancel Link to Text Question Attempts 1 of 3 used Save for later Submit Answer Copyright 2000 2016 by John Wiley Sons, Inc or related companies All rights reserved Tooltip JS control id intjsTooltip 1 Warning Your instructor has reset your attempts for this question The question will reload in the original state Click Continue to proceed with the question CONTINUE img height 1 width 1 alt src googleads g doubleclick net pagead viewthroughconversion 944609404 value 0 guid ON script 0 div gt

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Question: Exercise 11-7 Exercise 11-7 Your answer is partially correct.Try again. On October 31, the stockholders equity section of Pele Companys balance sheet consists of common

Exercise 11-7


	Your answer is partially correct.Try again.

On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $513,000and retained earnings $404,800. Pele is considering the following two courses of action:

(1)	Declaring a7% stock dividend on the85,500$6par value shares outstanding
(2)	Effecting a 2-for-1 stock split that will reduce par value to $3per share.

The current market price is $18per share. Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares.

Pele Companys Balance Sheet
Before Action	After Stock Dividend	After Stock Split
Stockholders equity
Paid-in capital	$ 513000	$	$ 513000
Retained earnings	404800		404800
Total stockholders equity	$ 917800	$ 917800	$ 917800
Outstanding shares	85500

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