Problem 8-22

Problem 18-22 The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $5 per share. Common stock (50,000 shares) $100,000 Retained earnings 200,000 $300,000 The firm intends to rst declare a 10 percent stock dividend and then pay a $020 cash dividend (which also causes a reduction of retained earnings). Show the capital section of the balance sheet after the rst transaction and then after the second transaction. Western Pipe Company After 1St transaction Common stock (55,000 shares) $ Retained earnings $|:| Western Pipe Company After 2nd transaction Common stock (55,000 shares) $ Retained earnings $|:|