The common stock of Alexander Hamilton Inc. is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding.

Prepare the necessary journal entries assuming the following.
A. The board votes a 2-for-1 stock split.
B. The board votes a 100% stock dividend.
C. Briefly discussed the accounting and securities market differences between these two methods of increasing the number of shares outstanding.

VanessaHutchinson

On July 31, 2007, the stockholders’ equity section of Charlie Company’s balance sheet consists of $12 par common stock, 54,000 shares issued andoutstanding, $648,000 , and retained earnings of $400,000, for a total stockholders equity of $1,048,000. Charlie is considering one of the following two courses of action:
1) declaring a 5% stock dividend on the outstanding stock.
2) effecting a 3-for-1 stock split , that will reduce par value to $4 per share.
Calculate the book value per share and outstanding shares assuming the company:
a. the does neither action ______________ ______________
b. declares the stock dividend ______________ ______________
c. effects the stock split. ______________ ______________