Problem
On October 31, the stockholders' equity section of Omar Company consists of common stock $300,000 and retained earnings $900,000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 50,000, $6 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $3 per share. The current market price is $13 per share.
Complete the tabular summary of the effects of the alternative actions on the components of stockholders' equity and outstanding shares. and per value per share,use the following column headings: before action,after stock dividend and after stock split.