1. Stock splits and stock dividends may be used by a corporation to change the number of shares of its stock outstanding.
(a) What is meant by a stock split effected in the form of a dividend?
(b) From an accounting viewpoint, explain how the stock split effected in the form of a dividend differs from an ordinary stock dividend.
(c) How should a stock dividend that has been declared but not yet issued be classified in a statement of financial position? Why?