Question

On January 1, Biofuel Corporation had the following capital structure: Common stock ($0.10 par value) Additional paid-in capital Retained earnings Treasury stock Cash flows from financing activities S 60,000 1,900,000 800,000 19,000 Required: Complete the table below for each of the three following independent cases: Case 1: The board of directors declared and paid a cash dividend of $0.02 per share. Case 2: The board of directors declared and issued a 100 percent stock dividend when the stock was selling at $10 per share. Case 3: The board of directors announced a 2-for-1 stock split. The market price prior to the split was $10 per share. Items Before any Dividend After Cash Dividend Ater Stock Dividend After Stock Split Common stock account Par per share Shares outstanding Additional paid-in captial Retained earnings Total stockholder's equity Cash flows from financing acitivities

Answer 1

Calculate following :

Items	Before any dividend	After cash dividend	After stock dividend	After stock split
Common Stock account	60000	60000	120000	60000
Par value share	0.10	0.10	0.10	0.05
Share outstanding	600000	600000	1200000	1200000
Additional paid in capital	1900000	1900000	1900000	1900000
Retained earnings	800000	788000	740000	800000
Total Stockholder's equity	2760000	2748000	2760000	2760000
Cash flow from financing activties	19000	7000	19000	19000