Following Is the Shareholders' Equity Section of Morgan Supplies on a Day

question 21

Essay

Following is the shareholders' equity section of Morgan Supplies on a day its common stock is trading at $77 per share.
$$\begin{array} { | l | c | } \hline \text { Common stock (2 par value, 30,000 shares issued and autstanding } & \text { \$60,000} \\\hline \text { Addlitional paid-in capital an comman stock } & 1,200,000 \\\hline \text { Retained earnings } & 3,000,000 \\\hline\end{array}$$
Required:
a.Use the financial statement template below to show the financial statement effects of
the following dividend events.(Assume that the events are independent.)
(1)Cash dividend declaration and payment of $1 per share
(2)Property dividend declaration and payment of shares representing a short-term
investment in Screen Products,Ltd.,with a fair value of $15,000
(3)10 percent stock dividend
(4)100 percent stock dividend
(5)3-for-1 stock split
(6)1-for-2 reverse stock split

Journal entry (optional):
b.Which events changed the book value of common equity?
c.Under what conditions will these events lead to future increases and decreases in ROE?

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RSV

Respiratory Syncytial Virus is a common respiratory virus that usually causes mild, cold-like symptoms but can be serious in infants and older adults.

COPD

Chronic Obstructive Pulmonary Disease, a group of lung conditions that cause breathing difficulties.

ERV

Expired Reserve Volume; the additional amount of air that can be forcibly exhaled after the completion of a normal, quiet expiration.

AFB

Acid-fast bacillus, a type of bacteria that is resistant to decolorization by acids during staining procedures; commonly used to refer to tuberculosis-causing bacteria.