Squash Delight Inc. has the following balance sheet: Cash Accounts receivable Fixed assets Total assets Assets...

   

Transcribed Image Text:

Squash Delight Inc. has the following balance sheet: Cash Accounts receivable Fixed assets Total assets Assets Liabilities Accounts payable Notes payable Common stock (100,000 shares @ $2 par) Capital in excess of par Retained earnings Total liabilities & owners' equity. Common stock Capital excess of par Retained earnings Total equity $ 55,000 275,000 870,000 $1,200,000 Effect of Stock Split The firm's stock sells for $12 a share. a. Show the effect on the capital accounts of a two-for-one stock split. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) $ 250,000 58,000 200,000 100,000 592,000 $1,200,000 b. Show the effect on the capital accounts of a 10 percent stock dividend. Part bis separate from part a. In part b, do not assume the stock split has taken place. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) Common stock Capital excess of par Retained earnings Total equity Effect of Stock Dividend Squash Delight Inc. has the following balance sheet: Cash Accounts receivable Fixed assets Total assets Assets Liabilities Accounts payable Notes payable Common stock (100,000 shares @ $2 par) Capital in excess of par Retained earnings Total liabilities & owners' equity. Common stock Capital excess of par Retained earnings Total equity $ 55,000 275,000 870,000 $1,200,000 Effect of Stock Split The firm's stock sells for $12 a share. a. Show the effect on the capital accounts of a two-for-one stock split. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) $ 250,000 58,000 200,000 100,000 592,000 $1,200,000 b. Show the effect on the capital accounts of a 10 percent stock dividend. Part bis separate from part a. In part b, do not assume the stock split has taken place. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) Common stock Capital excess of par Retained earnings Total equity Effect of Stock Dividend

Answer rating: 100% (QA)

a Effect of twoforone stock split Common stock The number of ... View the full answer