Lakeview Company reported the following amounts on its balance sheet at December 1, 2015:
The following transactions occurred during December:
1. Declared a 20% stock dividend on common stock on December 3, when the stock was selling at $12 per share. The stock dividend will be distributed on December 20, 2015.
2. Distributed the common stock dividend on December 20.
3. Approved a 2-for-1 stock split of the common stock on December 28, when the stock was selling for $20 per share.
A Show the effect of the transactions on the accounting equation.
B Answer the following questions:
1. How many common shares are outstanding at December 31, 2015?
2. What effect will the stock split have on the stock's market value?

Question

Lakeview Company reported the following amounts on its balance sheet at December 1, 2015:
  The following transactions occurred during December:
1. Declared a 20% stock dividend on common stock on December 3, when the stock was selling at $12 per share. The stock dividend will be distributed on December 20, 2015.
2. Distributed the common stock dividend on December 20.
3. Approved a 2-for-1 stock split of the common stock on December 28, when the stock was selling for $20 per share.
A Show the effect of the transactions on the accounting equation.
  B Answer the following questions:
1. How many common shares are outstanding at December 31, 2015?
2. What effect will the stock split have on the stock's market value?

Quizplus · Accepted Answer

The Answer of Lakeview Company reported the following amounts on its balance sheet at December 1, 2015:
  The following transactions occurred during December:
1. Declared a 20% stock dividend on common stock on December 3, when the stock was selling at $12 per share. The stock dividend will be distributed on December 20, 2015.
2. Distributed the common stock dividend on December 20.
3. Approved a 2-for-1 stock split of the common stock on December 28, when the stock was selling for $20 per share.
A Show the effect of the transactions on the accounting equation.
  B Answer the following questions:
1. How many common shares are outstanding at December 31, 2015?
2. What effect will the stock split have on the stock's market value?

Lakeview Company Reported the Following Amounts on Its Balance Sheet