Answered>Order 873

On October 31, the stockholders’ equity section of Heins Company consists of common stock $290,000 and retained earnings $888,000. Heins is considering the following two courses of action: (1) declaring a 4% stock dividend on the 29,000, $10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $16 per share.Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share.BeforeActionAfterStockDividendAfterStockSplitStockholders’ equity