On July 1, Jones Corporation had the following capital structure: Common Stock,

Question

On July 1, Jones Corporation had the following capital structure: Common Stock, par $1; 8,000,000 authorized shares, 170,000 issued and outstanding $170,000 Additional Paid-in Capital Retained Earnings Treasury Stock 104,000 184,000 None Required Complete the following table based on two independent cases involving stock transactions: (Round "per share" answers to 2 decimal places.) Case 1: The board of directors declared and issued a 100 percent stock dividend when the stock price was $6 per share Case 2: The board of directors voted a 2-for-1 stock split. The stock price prior to the split was $6 per share Case 1 Case 2 Before Stock After 100% Transactions Stock Dividend Items Split Number of Shares Outstanding Par Per Share Common Stock Account Additional Paid-in Capital Retained Earnings Total Stockholders' Equity 1.00 104,000 184,000 $ 288,000 $ 0

Explanation / Answer

Before After After Stock 100% Stock split Trns stock div Number of shares outstanding 170,000 340000 340,000 par per share 1 1 0.5 common stock account 170,000 340,000 170,000 addittional paid in capital 104,000 104,000 104,000 Retained earnings 184,000 14,000 184,000 total Stockholders Equity 458,000 458,000 458,000 case 1 stock dividend (100%) = 170,000*1 large stock dividend are issued at par value Case 2 stock split = 170,000*1 shares par value = .50

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