Compute the effect of a split on the par value

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Reference no: EM132781317

Stock splits

Stockholders' Equity:

8% cumulative preferred stock, $100 par,

50,000 shares authorized; 15,000 shares issued..................... . $1,500,000

Common stock, $6 par, 1,500,000 shares authorized,1.000.000 shares

Outstanding ....................................................................................... 6,000,000

Additional paid-in capital: preferred stock .......................................... 260,000

Additional paid-in capital: common stock .......................................... 3,600,000

Retained earnings ............................................................................. 2,360,000

Given the stockholders' equity section above:

Problem a. Compute the effect of a 2 to 1 split on the par value and number shares of the common stock.

Problem b. Compute the effect of a 4 to 1 split on the par value and number shares of the common stock.

Problem c. Does the stock split have any effect on the company's stockholders' equity?

Reference no: EM132781317

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