Asked by linda farran on Jul 19, 2024
Verified
Which of the following show the proper effect of a stock split and a stock dividend? Item Stock Split Stock Dividend \begin{array}{ccc}&&&&\text { Item}&&&&&\text { Stock Split } && \text { Stock Dividend } \\\end{array} Item Stock Split Stock Dividend
A) Total paid-in capital Increase Increase \begin{array}{ccc}\text { Total paid-in capital } &&& \text { Increase } &&& \text { Increase } \\\end{array} Total paid-in capital Increase Increase
B) Total retained earnings Decrease Decrease \begin{array}{ccc}\text { Total retained earnings } && \text { Decrease } &&& \text { Decrease } \\\end{array} Total retained earnings Decrease Decrease
C) Total par value (common) Decrease Increase \begin{array}{ccc}\text { Total par value (common) } & \text { Decrease } &&& \text { Increase } \\\end{array} Total par value (common) Decrease Increase
D) Par value per share Decrease No change \begin{array}{ccc}\text { Par value per share } &&&& \text { Decrease } &&& \text { No change }\end{array} Par value per share Decrease No change
Stock Split
An action by a company to divide its existing shares into multiple shares to lower the trading price of the stock, making it more accessible to investors.
Stock Dividend
A distribution of extra shares given to shareholders by a corporation, instead of distributing cash.
- Pinpoint the parts and classification system of stock dividends and stock splits in financial disclosures.
- Identify and calculate the effects of stock splits on a company's financial statements.
Verified Answer
JG
Learning Objectives
- Pinpoint the parts and classification system of stock dividends and stock splits in financial disclosures.
- Identify and calculate the effects of stock splits on a company's financial statements.