On February 1, a corporation has 50,000 shares of $1 par value common stock issued and outstanding. The corporation also has Additional Paid-in Capital of $300,000 and Retained Earnings of $300,000. On February 1, the corporation declared a 2-for-1 stock split. After the split, what is the total par value of the common stock and the total stockholders' equity, respectively?

Question

Quizplus · Accepted Answer

A 2-for-1 stock split doubles the number of shares and halves the par value per share, so the total par value remains the same at $50,000. Stockholders' equity is the sum of common stock, additional paid-in capital, and retained earnings, which remains unchanged at $650,000.

On February 1, a Corporation Has 50,000 Shares of $1