On July 31, 2013, the Archer Company reported the following information in the e

Question

On July 31, 2013, the Archer Company reported the following information in the equity section of their balance sheet:

Stockholders' equity

Common stock, $1.00 par, 500,000 shares authorized, 20,000 shares issued $20,000

Paid-in capital in excess of par 1,180,000

Retained earnings 3,200,000

Total stockholder's equity $4,400,000

Assume that Archer carries out a 4-for-1 stock split. Please prepare a similar equity section showing the effects of the stock split.

(Please round all numbers to the nearest cent.)

Explanation / Answer

Equity Section after the stock split Stockholders' equity Common stock, $.25 par, 2000,000 shares authorized, 80,000 shares issued $80,000 Paid-in capital in excess of par 1,180,000 Retained earnings 3,200,000 Total stockholder's equity $4,400,000

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