On october 31 the stockholders equity of heins company, Ask an Expert

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On october 31, the stockholders' equity of Heins Company consists of common stock $500,000 and retained earnings $900,000. Heins is considering the following two courses of action: (1) declaring a 5% stock dividend on the 50,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share. Instructions: Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split. .

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9944152

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