Preferred Products started business on 1 March 2013, and issued 100 000 ordinary shares at a price of $2 per share. One year later, the share price had soared to $12. If Preferred Products does a
3- for- 1 share split, the balance sheet will show that there are 200 000 shares issued.

Question

Quizplus · Accepted Answer

A 3-for-1 share split means each existing share is divided into three, so 100,000 shares would become 300,000 shares, not 200,000.

Preferred Products Started Business on 1 March 2013, and Issued