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Part 3: Dividends and Splits The Board of Directors of Oriole Company is debating what type...

Part 3: Dividends and Splits

The Board of Directors of Oriole Company is debating what type of dividend (or stock split) to give its shareholders. The common stock is currently trading at $34 per share. The following is Oriole’s current stockholders’ equity:

Common stock, $10 par $ 400,000

Additional paid in capital – common stock 800,000

Retained earnings 1,300,000

Required

Using the above information, show the appropriate journal entries under each of the following unrelated assumptions:

  1. Assume the company chooses a cash dividend of $2.50 per share.
  1. Assume the company chooses a property dividend. This dividend will be paid using Oriole’s investment in shares of Blue, Inc.’s stock. This investment is carried on Oriole’s books at $250,000 and has a market value of $310,000 on the date of declaration.
  1. Assume the company chooses a 15% stock dividend.
  1. Assume the company chooses a 30% stock dividend.
  1. Assume the company chooses a 3-for-1 stock split.

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Expert Solution

ekkarill92 answered 1 year ago
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