Robinson's has 15,000 shares outstanding with a par value of £1.00 per share and a market price of £36 a share.The statement of ﬁnancial position shows £15,000 in the ordinary equity account,
£315,000 in the additional paid in capital account, and £189,000 in the retained earnings account.
The ﬁrm just announced a 3-for-2 stock split.What will the paid in surplus account value be after the
Split?

Question

Quizplus · Accepted Answer

A stock split does not affect the total value of the paid-in surplus account. Therefore, the paid-in surplus account value remains at £315,000 after the split.

Robinson's Has 15,000 Shares Outstanding with a Par Value of £1.00