(Answered) Exercise 11-7 on october 31 the stockholders equity section

Accounting

Exercise 11-7 On October 31, the stockholders' equity section of Pele Company's balance sheet consists of common stock $388,800 and retained earnings $434,500.

Pele is considering the following two courses of action:

(1) Declaring a 6% stock dividend on the 97,200 $4 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share.

The current market price is $13 per share.

Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.

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