Delta IncHad 1,000,000 Shares of $4 Par Value Common Stock Authorized

question 228

Essay

Delta Inc.had 1,000,000 shares of $4 par value common stock authorized.On December 31,2015,there were 400,000 shares issued and outstanding.The market value of its common stock on that date was $100 per share.On January 5,2016,the board of directors declared a stock dividend.
Required:
Part a.Assume that you have 100 shares of Delta Inc.common stock.Determine how many shares will you have after a 100% stock dividend.
Part b.Briefly explain the how a 100% stock dividend affects the stockholders' equity accounts and the total resources of the company.(Do not quantify the impacts or prepare a journal entry.)
Part c.Assume instead that the board declared a 10% stock dividend.Briefly explain how that 10% stock dividend affects the stockholders' equity accounts and the total resources of the company.(Do not quantify the impacts or prepare a journal entry.)
Part d.Identify three possible explanations for the declaration of a stock dividend.

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Definitions:

Reuptake

The absorption by a presynaptic nerve ending of a neurotransmitter that it has secreted, critical in regulating neurotransmitter levels and influencing neural communication.

Performance Anxiety

Anxiety over sexual performance that interferes with sexual functioning.

Spectatoring

The process of mentally observing and evaluating one's own sexual performance, often leading to anxiety and sexual dysfunction.

Sexual Aversion

A psychological disorder characterized by a persistent and intense aversion to sexual contact or any sexual-related activities.