Question - On January 1, Biofuel Corporation had the following capital structure:
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Common stock ($0.10 par value)
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$60,000
|
|
Additional paid-in capital
|
1,900,00
|
|
Retained earnings
|
800,000
|
|
Treasury stock
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0
|
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Cash flows from financing activities
|
19,000
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Required: Complete the table below for each of the three following independent cases:
Case 1: The board of directors declared a cash dividend of $0.02 per share.
Case 2: The board of directors declared and issued a 100 percent stock dividend when the stock was selling at $10 per share.
Case 3: The board of directors announced a 2-for-1 stock split. The market price prior to the split was $10 per share.
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Items
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Before any Dividend
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After Cash Dividend
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After Stock Dividend
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After Stock Split
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Common stock account
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$60,000
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$60,000
|
$120,000
|
$60,000
|
|
Par per share
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$0.10
|
$0.10
|
$0.10
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$0.05
|
|
Shares outstanding
|
600,000
|
600,000
|
|
1,200,000
|
|
Additional paid-in capital
|
$1,900,000
|
$1,900,000
|
|
$1,900,000
|
|
Retained earnings
|
$800,000
|
$788,000
|
$740,000
|
$800,000
|
|
Total stockholder's equity
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$2,760,000
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$2,748,000
|
|
$2,760,000
|
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Cash flows from financing activities
|
$19,000
|
|
$19,000
|
$19,000
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