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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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