Finance problem 14
lsctt714.
value:
2.00 points
2.00 points
| Squash Delight Inc. has the following balance sheet: |
| Assets | ||
| Cash | $ | 45,000 |
| Accounts receivable | 295,000 | |
| Fixed assets | 772,000 | |
| Total assets | $ | 1,112,000 |
| Liabilities | ||
| Accounts payable | $ | 296,000 |
| Notes payable | 54,000 | |
| Common stock (100,000 shares @ $2 par) | 200,000 | |
| Capital in excess of par | 100,000 | |
| Retained earnings | 462,000 | |
| Total liabilities & owners' equity | $ | 1,112,000 |
| The firm’s stock sells for $14 a share. |
| a. | Show the effect on the capital accounts of a two-for-one stock split. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) |
| Common stock | $ [removed] | |
| Capital excess of par | $ [removed] | |
| Retained earnings | $ [removed] | |
| Total equity | $ [removed] | |
| b. | Show the effect on the capital accounts of a 10 percent stock dividend. Part b is separate from part a. In part b do not assume the stock split has taken place. (Do not round intermediate calculations and round your answers to the nearest whole dollar.) |
| Common stock | $ [removed] | |
| Capital excess of par | $ [removed] | |
| Retained earnings | $ [removed] | |
| Total equity | $ [removed] | |
| c. | Based on the balance in retained earnings, which of the two dividend plans is more restrictive on future cash dividends? | ||||
|
10 years ago
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