Squash Delight Incorporated has the following balance sheet:
Assets
Cash
$ 80,000
Accounts receivable
302,000
Fixed assets
728,000
Total assets
$ 1,110,000
Liabilities
Accounts payable
$ 270,000
Notes payable
58,000
Common stock (100,000 shares @ $4 par)
400,000
Capital in excess of par
100,000
Retained earnings
282,000
Total liabilities & owners' equity
$ 1,110,000
The firm’s stock sells for $13 a share.
Show the effect on the capital accounts of a two-for-one stock split.Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.
Show the effect on the capital accounts of a 10 percent stock dividend. Part b is separate from part a. In part b, do not assume the stock split has taken place.Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.
Based on the balance in retained earnings, which of the two dividend plans is more restrictive on future cash dividends?
multiple choice
Stock dividend
Stock split