Question

Required information Problem 10-3A Indicate effect of stock dividends and stock splits (LO10-6) The following information applies to the questions displayed below.) Sammy's Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split. Problem 10-3A Part 1 Required: 1. Complete the following table comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders' equity accounts, shares outstanding, par value, and share price. (Round "Par value per share" to 2 decimal places.) Before After 100% Stock Dividend After 2-for-1 Stock Split Common stock, S1 par value Additional paid-in capital Total paid-in capital Retained earnings Total stockholders' equity Shares outstanding Par value per share Share price $ 1,200 57.000 58,200 23,650 $ 81,850 1,200 $ 1.00 $ 126

Answer 1

	Before	After 100% Stock Dividend	After 2 ­for ­1 Stock Split
Common stock, $1 par value	1200	2400	1200
Additional paid ­in capital	57000	57000	57000
Total paid ­in capital	58200	59400	58200
Retained earnings	23650	22450	23650
Total stockholders' equity	81850	81850	81850
Shares outstanding	1200	2400	2400
Par value per share	1.00	1.00	0.50
Share price	126	63	63