Question

ACT202: Chapter 13 Home Work Exercises Exercise 13-5: Large Stock Dividend and Stock Split: GIVEN: On June 30, 2017, Sharper Corporation's common stock is priced at $30.50 per share before any stock dividend or split, and the stockholders' equity section of its BS appears as follows: Common stock - $6 par value, 90,000 shares authorized, 36,000 shares issued and outstanding Paid-in capital in excess of par value, Common Stock Retained earnings Total Stockholders' Equity $ $ $ $ 216,000 100,000 316,000 632,000 Part 1: Complete the table below assuming the company declares and immediately distributes a 100% stock dividend. Before Dividends Adjustment A fter Dividend Stock Dividend Common Stock Paid-in Capital in excess of par value Total contributed capital Retained earnings Total stockholders' equity Number of common shares outstanding Part 2: Complete the table below assuming the company implements a 2-for-1 stock split instead of the 100% stock dividend in part 1 above. F Before Split. Adjustment Alter Split S Stock Split Common Stock Paid-in Capital in excess of par value Total contributed capital Retained earnings Total stockholders' equity Number of common shares outstanding

Answer 1

Part 1

Stock Dividend	Before Dividend	Adjustment	After Dividend
Common stock	216000	216000	432000
Paid-in capital in excess of par value	100000	0	100000
Total contributed capital	316000	216000	532000
Retained earnings	316000	-216000	100000
Total stockholders' equity	632000	0	632000
Number of common shares outstanding	36000	36000	72000

Part 2

Stock Split	Before Split	Adjustment	After Split
Common stock	216000	0	216000
Paid-in capital in excess of par value	100000	0	100000
Total contributed capital	316000	0	316000
Retained earnings	316000	0	316000
Total stockholders' equity	632000	0	632000
Number of common shares outstanding	36000	36000	72000