Kosco CD Company has had 4 years of record earnings. Due to this success, the ma

Question

Kosco CD Company has had 4 years of record earnings. Due to this success, the market price of its 499,400 shares of $4 par value common stock has increased from $14 per share to $54. During this period, paid-in capital remained the same at $5,922,800. Retained earnings increased from $4,494,600 to $29,964,000. CEO Al Dryer is considering either a 11% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after affects of each option on retained earnings and total stockholders' equity.

Kosco CD Company

Please fill in every box with the correct answer. Thank you.

Original Balance After Dividend After Split Paid-in capital $ $ $ Retained earnings Total stockholder's equity $ $ $ Shares outstanding

Explanation / Answer

Answer:

O Calculation Original Balance After Dividend After Split Paid-in capital 5922800 O+$651508 6574308 5922800 Retained earnings 29964000 O-$651508 29312492 29964000 Total stockholder's equity 35886800 35886800 35886800 Shares outstanding 499400 O+12065 511465 (499,400*(2/1) 998800

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