Andromeda Industries had 300,000 shares of common stock with a $3 par value and retained earnings of $180,000.In 2010, earnings per share were $1.80.In 2009, the stock was split 3 for 1.Which of the following would not result from the stock split?
A) The new shares would total 900,000.
B) The total amount in the capital stock account would remain the same.
C) The par value would become $1.
D) Retained earnings would be reduced.
E) The earnings per share for 2006 would be restated at $0.60.

Question

Quizplus · Accepted Answer

A stock split does not affect retained earnings; it only increases the number of shares and decreases the par value per share.

Andromeda Industries Had 300,000 Shares of Common Stock with a $3