On june 30, 2011, quinn corporation's common stock is priced at $31 per share before any stock dividend or splite, and the stockholders' equity section of its balance sheet appears of as follows.
Common stoch- $10 per value,60,000 shares
Authorized, 25,000 shares issued and outstanding .........$250,000
Paid -in capital in excess of par value, commen stock ......100,000
Retained earnings ..................................................330,000
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Total stockolders' equity ............................................680,000
1- assume that the company declares and immediately distributes a 100% stock dividend. That event is recorded by capitalizing reatined earnings equal to stock's per value. Answer these questions about stockholders' equity as it exists after issuing the new shares.
A- what is the retained earnings balance ?
B- what is the amount if total stockholders' equity ?
C- how many shares are outstanding ?
2- assume that the company implements 2- for -1 stock split instead of the stock dividend in part 1. Answer these questions about stockholders' equity as it exists after issuing the new shares.
A- what is the retained earnings balance ?
B- what is the amount of total stockholders' equity ?
C- how many shares are outstanding ?
3- explain the difference, if any, to a stockholder from receiving new shares distributed under a large stock dividend versus a stock split