Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.4 cash dividend, (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share. Help Sipacore make its decision by completing the following chart (treat each possibility independently): Before Action After Cash Dividend After Stock Dividend After Stock Split Total assets $1,372,000 $enter a total amount for the first part $enter a total amount for the first part $enter a total amount for the first part Total liabilities $266,000 $enter a total amount for section one of the second part $enter a total amount for section one of the second part $enter a total amount for section one of the second part Shareholders’ equity Common shares 645,000 enter a dollar amount enter a dollar amount enter a dollar amount Retained earnings 461,000 enter a dollar amount enter a dollar amount enter a dollar amount Total shareholders’ equity 1,106,000 enter a total amount for section two of the second part enter a total amount for section two of the second part enter a total amount for section two of the second part Total liabilities and shareholders’ equity $1,372,000 $enter a total amount for the second part $enter a total amount for the second part $enter a total amount for the second part Number of common shares 100,000 enter a number of shares enter a number of shares enter a number of shares

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 66P

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Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.4 cash dividend, (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share.

Help Sipacore make its decision by completing the following chart (treat each possibility independently):

	Before Action	After Cash Dividend	After Stock Dividend	After Stock Split
Total assets	$1,372,000	$enter a total amount for the first part	$enter a total amount for the first part	$enter a total amount for the first part
Total liabilities	$266,000	$enter a total amount for section one of the second part	$enter a total amount for section one of the second part	$enter a total amount for section one of the second part
Shareholders’ equity
Common shares	645,000	enter a dollar amount	enter a dollar amount	enter a dollar amount
Retained earnings	461,000	enter a dollar amount	enter a dollar amount	enter a dollar amount
Total shareholders’ equity	1,106,000	enter a total amount for section two of the second part	enter a total amount for section two of the second part	enter a total amount for section two of the second part
Total liabilities and shareholders’ equity	$1,372,000	$enter a total amount for the second part	$enter a total amount for the second part	$enter a total amount for the second part
Number of common shares	100,000	enter a number of shares	enter a number of shares	enter a number of shares

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