Can someone help with this. Thanks A corporation reported the following informat

Question

Can someone help with this. Thanks

A corporation reported the following information at December 31, 2015:

A) On December 31, 2015, the board of directors issues a 3-for-1 stock split. What impact will the split have on the stock's par value?

Par value would be cut in(to) SelecthalfthirdsfourthsCorrect 1 of Item 1 because the number of shares would SelectdoubletriplequadrupleCorrect 2 of Item 1. The resulting (new) par value would be $ per share.

B) What journal entry is required to record the split?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

Jan. 10, 2016

  

  

  

  

Common Stock, $3 par, 10,000 shares authorized, issued and outstanding $30,000 Paid-in Capital in Excess of Par--Common Stock 80,000 Total Capital Stock $110,000 Retained Earnings 40,000 Total Stockholders' Equity $150,000

Explanation / Answer

Stock Split 3 for 1 stock split Total No of shares 10000 Stock split 10000*3 = 30000 shares The par value = 30000/30000 The stock par value will be reduced to $ 1 per share Journal Entry Common Stock $ 3 par , 10000 shares 30000 To Common stock $ 1 par, 30000 shares 30000 On declaration Dividens Dr 30000 To Dividend payable 30000 Dividend Payable Dr 30000 To cash 30000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.