Jurgens Company has had 4 years of net income. Due to this success, the market p
ID: 2420036 • Letter: J
Question
Jurgens Company has had 4 years of net income. Due to this success, the market price of its 400,000 shares of $4 par value common stock has increased from $14 per share to $51. During this period, paid-in capital remained the same at $4,230,000. Retained earnings increased from $1,700,000 to $11,400,000. President E. Rife is considering either a 15% stock dividend or a 2-for-1 stock split.
Jurgens Company has had 4 years of net income. Due to this success, the market price of its 400,000 shares of $4 par value common stock has increased from $14 per share to $51. During this period, paid-in capital remained the same at $4,230,000. Retained earnings increased from $1,700,000 to $11,400,000. President E. Rife is considering either a 15% stock dividend or a 2-for-1 stock split.
Explanation / Answer
Staement showing effect of stock dividend and stock split
Statement showing stock holder;s equity
After stock dividend after stock split Current retained earnings 11400000 11400000 Less: Stock dividend (400000 x 15% x 51) 3060000 0 Less: stock split (400000/2 x 51) 0 10200000 Retained earning 8340000 1200000Related Questions
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