Down River Express has 5,000 shares of stock outstanding with a par value of $1.00 per share. The current market value of the ﬁrm is $390,000. The balance sheet shows a paid in surplus account
Value of $122,000 and retained earnings of $216,000. The company just announced a 2-for-1 stock
Split. What will the paid in surplus account balance be after the split?

Question

Quizplus · Accepted Answer

A stock split does not affect the paid-in surplus account balance. Therefore, the paid-in surplus account balance remains $122,000 after the split.

Down River Express Has 5,000 Shares of Stock Outstanding with a Par