Q1) On January 1, 2007, Frederiksen Inc.'s Stockhlders' Equity category appeared as follows:
Preferred stock, $80 par value, 7%
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3000 shares issues and outstanding
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$240,000
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Common stock, $10 par value,
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15,000 shares issued and outstanding
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150,000
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Additional paid-in capital-Preferred
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60,000
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Additional paid-in capital-Common
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225,000
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Total contributed capital
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$675,000
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Retained earnings
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2,100,000
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Total stockholders' equity
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$2,775,000
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Preferred stock is noncumulative and nonparticipating. In 2007, following transactions occurred:
a) On March 1, declared cash dividend of $16,800 on preferred stock. Paid dividend on April 1.
b) On June 1, declared a 5% stock dividend on common stock. Current market price of common stock was $18. The stock was issued on July 1.
c)On September 1, declared cash dividend of $0.50 per share on common stock; paid dividend on October 1.
d)On December 1, issued a 2-for-1 stock split of common stock, when stock was selling at $50 per share.
problem:
prepare a paragraph which describes difference between stock dividend and stock split.