Exercise 135 Stock dividends and splits LO P2 On June 30 201

Exercise 13-5 Stock dividends and splits LO P2 On June 30, 2017, Sharper Corporation\'s common stock is priced at $28.00 per share before any stock dividend or split, and the stockholders\' equity section of its balance sheet appears as follows Common stock-$8 par value, 88,800 shares authorized, 32,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings s 256,eee 100,000 356,000 s 712,00e Total stockholders\" equity Print Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock\'s par value. Answer these questions about stockholders equity as it exists after issuing the new shares e.?.& c. Complete the below table to calculate the retained earnings balance, total stockholders\' equity and number of outstanding shares. 2. Assume that the company implements a 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 o.b.& c. Complete the below table to calculate the retained earnings balance. total stockholders\' equity and number of outstanding

Solution

Req 1: Before Impact of After Stock Stock Dividend: Stock Div, Stock Div. Dividend Common Stock 256,000 256000 512000 Paid in capital 100,000 0 100000 Total contributed capital 356000 256000 612000 Retained earnings 356000 -256000 100000 Total Stockholder\'s equity 712000 0 712000 Number of common Shares 80000 80000 160000 Req 2: Before Impact of After Stock Stock Split Stock Split tock Split Split Common Stock 256,000 0 256000 Paid in capital 100,000 0 100000 Total contributed capital 356000 0 356000 Retained earnings 356000 0 356000 Total Stockholder\'s equity 712000 0 712000 Number of common Shares 80000 80000 160000