Accounting for stock splits and dividendsthe addington book

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Reference no: EM13381186

Accounting for Stock Splits and Dividends

The Addington Book Company has the following equity position. The stock is currently selling for $3 per share.

common Stock
(8 million shares outstanding, $3 par)

16,000,000

Paid in excess

4,000,000

Retained earnings

12,000,000

Total common equity

32,000,000

Book value per share

$4.00

a. What was the average price at which the company originally sold its stock?

b. Reconstruct the equity statement above to reflect a four for one stock spit.

c. Reconstruct the statement to reflect a 12.5% stock dividend.

Reference no: EM13381186

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