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| Teaching Since: | Apr 2017 |
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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
The common stock of Brandy, Inc is currently selling at $120 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Nine million shares are issued and outstanding.
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Required:
Prepare the necessary journal entries assuming the following.
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(a)Â Â The board declares and issues a 2-for-1 stock split.
(b)Â Â The board declares and issues a 100% stock dividend.
(c)Â Â Briefly discuss the accounting and securities market differences between these two methods of increasing the number of shares outstanding.
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