On June 30, 2016, Sharper Corporation\'s common stock is priced at $26.50 per sh

Question

On June 30, 2016, Sharper Corporation's common stock is priced at $26.50 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Common stock $4 par value, 70,000 shares authorized 28,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity S112,000 100,000 212,000 S424,000 I. Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained eamings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares. a. b.& c. Complete the below table to calculate the retained eamings balance, total stockholders' equity and number of outstanding shares. Before Stock Dividend Impact of Stock Dividend After Stock Dividend Stock Dividend 112,000 224,000 Common stock Paid in capital in excess of par value Total contributed capital Retained Eanings Total Stockholders' Equity $112,000 100,000 212,000 424,000 $636,000 224,000 312,000 01$. 536,000 12,000 (112,000) Number of common shares outstanding 28.000 28,000 56,000 2. Assume that the company implements a 2-for-1 stock split instead of the stock dividend in part 1. Answer these questions about stockholders' equity as it exists after issuing the new shares. a.,b.& c. Complete the below table to calculate the retained eamings balance, total stockholders' equity and number of outstanding shares. Before Stock Impact of Stock Split After Stock Stock Split Common stock Paid in capital in excess of par value Total contributed capital Retained Eamings Total Stockholders' Equity lit 112.000 $ 100,000 212,000 424,000 lit 28,000 56,000 56,000 312,000 $ 368,000 112,000 (112,000) $ 636,000 Number of common shares outstanding 28,000 28,000 56,000

Explanation / Answer

Beforeimpact ofAfter stockStocks dividend

Stockstockdividend




dividenddividend

common stock

112,000112,000224,000
paid in capital in excess of par value100,0000100,000
total contributed capital
212,000112,000324,000
Retained Earnings

212,000-112,000100,000
total stockholders Equity
424,0000424,000








number of common shares outstanding28,00028,00056000












































Beforeimpact ofAfter stockStocks dividend

Stockstockdividend




dividenddividend

common stock

112,0000112,000
paid in capital in excess of par value100,0000100,000
total contributed capital
212,0000212,000
Retained Earnings

212,0000212,000
total stockholders Equity
424,0000424,000








number of common shares outstanding28,00014,00014,000

Before impact of After stock Stocks dividend Stock stock dividend dividend dividend common stock 112,000 112,000 224,000 paid in capital in excess of par value 100,000 0 100,000 total contributed capital 212,000 112,000 324,000 Retained Earnings 212,000 -112,000 100,000 total stockholders Equity 424,000 0 424,000 number of common shares outstanding 28,000 28,000 56000 Before impact of After stock Stocks dividend Stock stock dividend dividend dividend common stock 112,000 0 112,000 paid in capital in excess of par value 100,000 0 100,000 total contributed capital 212,000 0 212,000 Retained Earnings 212,000 0 212,000 total stockholders Equity 424,000 0 424,000 number of common shares outstanding 28,000 14,000 14,000

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