On October 31, the stockholders’ equity section of Wildhorse Company consists of common stock $300,000 and retained earn

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On October 31, the stockholders’ equity section of WildhorseCompany consists of common stock $300,000 and retained earnings$890,000. Wildhorse is considering the following two courses ofaction: (1) declaring a 4% stock dividend on the 30,000, $10 parvalue shares outstanding, or (2) effecting a 2-for-1 stock splitthat will reduce par value to $5 per share. The current marketprice is $16 per share. Prepare a tabular summary of the effects ofthe alternative actions on the components of stockholders’ equity,outstanding shares, and par value per share.
Before Action After Stock Dividend After Stock SplitStockholders’ equity Paid-in capital Common stock $enter a dollaramount 300000 $enter a dollar amount $enter a dollar amount Inexcess of par enter a dollar amount 0 enter a dollar amount enter adollar amount Total paid-in capital enter a total of the twoprevious amounts 300000 enter a total of the two previous amountsenter a total of the two previous amounts Retained earnings enter adollar amount 890000 enter a dollar amount enter a dollar amountTotal stockholders’ equity $enter a total amount 1190000 $enter atotal amount $enter a total amount Outstanding shares enter anumber of shares enter a number of shares enter a number of sharesPar value per share $enter a dollar amount $enter a dollar amount$enter a dollar amount