Park Avenue Toys reported the following information at December 31, 2015:
Answer the following questions for Park Avenue Toys.
1. Would the book value per share increase, decrease, or remain the same, if the company declared a 3-for-1 stock split on December 31, 2015? Explain.
2. If cash dividends were declared on January 10, 2016, at $1 per share, by how much would retained earnings decrease as a result? Assume that the 3-for-1 stock split occurred.

Question

Park Avenue Toys reported the following information at December 31, 2015:
  Answer the following questions for Park Avenue Toys.
1. Would the book value per share increase, decrease, or remain the same, if the company declared a 3-for-1 stock split on December 31, 2015? Explain.
2. If cash dividends were declared on January 10, 2016, at $1 per share, by how much would retained earnings decrease as a result? Assume that the 3-for-1 stock split occurred.

Quizplus · Accepted Answer

The Answer of Park Avenue Toys reported the following information at December 31, 2015:
  Answer the following questions for Park Avenue Toys.
1. Would the book value per share increase, decrease, or remain the same, if the company declared a 3-for-1 stock split on December 31, 2015? Explain.
2. If cash dividends were declared on January 10, 2016, at $1 per share, by how much would retained earnings decrease as a result? Assume that the 3-for-1 stock split occurred.

Park Avenue Toys Reported the Following Information at December 31