(Stock splits) The debt and equity section of the Robson Corporation balance she
ID: 2341444 • Letter: #
Question
(Stock splits) The debt and equity section of the Robson Corporation balance sheet is shown here:. The current market price of the common shares is $24. Reconstruct the financial statement assuming that (a) a 20 percent stock dividend is issued and (b) a 2-for-1 stock split is declared a. Reconstruct the financial statement assuming that a 20 percent stock dividend is issued. Debt Common equity 1800000 Round to the nearest dollar.) Par ($2.4; 240,000 shares) Paid-in capital Retained earnings (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) Data Table $3,530,000 Debt $1,800,000 Common equity b. Reconstruct the financial statement assuming that a 2-for-1 stock split is declared. Debt Common equity Par ($2.4; 200,000 shares) Paid-in capital Retained earnings 480,000 500,000 750,000 $3,530,000 (Round to the nearest dollar.) Par ($1.2;400,000 shares) Paid-in capital Retained earnings (Round to the nearest dollar.) (Round to the nearest dollar.) (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet) (Round to the nearest dollar.) $3,530,000 PrintDoneExplanation / Answer
Solution a:
It is assumed that 20% stock dividend is a large stock dividend and should be accounted for at par value.
Solution b:
Robson Corporation Balance Sheet (Partial) Particulars Amount Debt $1,800,000.00 Common Equity: Par ($2.4, 240000 shares) $576,000.00 Paid in capital $500,000.00 Retained Earnings ($750,000 - $96,000) $654,000.00 Total $3,530,000.00Related Questions
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