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Business, 17.06.2020 04:57 jpimentel2021

Sheridan Company has had 4 years of record earnings. Due to this success, the market price of its 450,000 shares of $2 par value common stock has increased from $12 per share to $51. During this period, paid-in capital remained the same at $2,700,000. Retained earnings increased from $2,025,000 to $13,500,000. CEO Don Ames is considering either (1) a 15% stock dividend or (2) a 2-for-1 stock split. He asks you to show the before-and-after effects of each option on (a) retained earnings, (b) total stockholders’ equity, and (c) par value per share.(a)1. Stock dividend - retained earnings $2. 2-for-1 stock split - retained earnings $(b) Sheridan Company Original Balance After DividendAfter SplitPaid-in capital $$$ Retained earnings Total stockholder’s equity $ $ $ Shares outstanding (c)1. Stock dividend - par value per share $2. 2-for-1 stock split - par value per share

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Sheridan Company has had 4 years of record earnings. Due to this success, the market price of its 45...
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