On June 30, 2017, Sharper Corporation\'s common stock is priced at $33.50 per sh
ID: 2560572 • Letter: O
Question
On June 30, 2017, Sharper Corporation's common stock is priced at $33.50 per share before any stock dividend or split, and the stockholders' equity section of its balance sheet appears as follows. Common stock-$8 par value, 65,000 shares authorized, 26,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity s208,000 100,000 308,000 616,000 I. Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing s retained earnings 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 earnings balance, total stockholders' equity and number of outstanding shares 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 earnings balance, total stockholders' equity and number of outstanding shares. Complete this question by entering your answers in the tabs belowExplanation / Answer
1.
a.
Retained earnings after new shares
= Retained earnings before new shares - (Number of shares issued x Par value)
= $308,000 - (26,000 x $8)
= $100,000
b.
Total stockholders equity after new shares = Total stockholders equity before new shares = $616,000
c.
Number of shares outstanding after new shares
= Number of shares outstanding before new shares + New shares
= 26,000 + 26,000
= 52,000
2.
a.
Retained earnings after new shares = Retained earnings before new shares = $308,000
b.
Total stockholders equity after new shares = Total stockholders equity before new shares = $616,000
c.
Number of shares outstanding after new shares
= Number of shares outstanding before new shares + New shares
= 26,000 + 26,000
= 52,000
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