On June 30, 2017, Sharper Corporation\'s common stock is priced at $25.00 per sh

Question

On June 30, 2017, Sharper Corporation's common stock is priced at $25.00 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 $208,000 100,000 308,000 $616,000 I. Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing 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 below. Required Required 2 Assume that the company declares and immediately distributes a 100% stock dividend This event is recorded by capitalizing retained earnings equal to the stock's par value. Answer these questions about stockholders' equity as it exists after issuing the new shares. Complete the below table to calculate the retained earnings balance, total stockholders' equity and number of outstanding shares Show less Before Impact of After Stock Dividend Dividend Dividend Stock Dividend Stock Stock Common stock Paid in capital in excess of par value Total contributed capital Retained earnings Total stockholders' equity Number of common shares outstandin

Explanation / Answer

1. a.b. & c. Stock Dividend Before stock dividend Impact of stock dividend After stock dividend Common stock 208000 208000 416000 Paid in capital in excess of par value 100000 0 100000 Total contributed capital 308000 208000 516000 Retained Earnings 308000 -208000 100000 Total stockholders' Equity 616000 0 616000 No.of common shares o/s 26000 26000 52000 2. a.b. & c. 2:1 Stock Split Before stock split Impact of stock split After stock split Common stock 208000 0 208000 Paid in capital in excess of par value 100000 0 100000 Total contributed capital 308000 0 308000 Retained Earnings 308000 0 308000 Total stockholders' Equity 616000 0 616000 No.of common shares o/s 26000 26000 52000

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