deyion Posts: 1, Reputation: 1 New Member #1 Nov 13, 2006, 05:02 PM
Stock Split and Stock Dividend
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 Posts: 2, Reputation: 0 New Member #2 Jan 29, 2008, 07:49 PM
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. ______________ ______________
 anne46 Posts: 2, Reputation: 1 New Member #3 Mar 15, 2012, 10:39 AM
Share splits doesn't require journal entries. But if needed then these will be the entries:

Dr: Common Stock; \$120 (old) \$1,080,000,000
Cr: Common Stock; \$60 (new) \$1,080,000,000

 anne46 Posts: 2, Reputation: 1 New Member #4 Mar 15, 2012, 10:41 AM
Share splits doesn't require journal entries. But if needed then these will be the entries:

Dr: Common Stock; \$120 (old) \$1,080,000,000
Cr: Common Stock; \$60 (new) \$1,080,000,000

 Question Tools Search this Question Search this Question: Advanced Search