Effect of stock dividends, stock splits, and treasury stock transactions. Many types of transactions may affect stockholders' equity.
Requirement
1. Identify the effects of the following transaction on total stockholder's equity. Each transaction is independent.
a. A 10% stock dividend. Before the dividend, 52,000 shares of 41par common stock were outstanding; market value was $3 at the time of the dividend.
b. A 2-for1 stock split. Prior to the split, 65,000 shares of $4 par common stock were outstanding.
c. Purchase of 1,000 shares of treasury stock (par value at $0.50) at $3 per share.
d. Sale of 900 shares of $0.50 par treasury stock for $5 per share. Cost of the treasury stock was $3 per share.