At the time that Kirby Company issued a 2-for-1 stock split, the company had 5,000 shares of $6 par value common stock outstanding. Stockholders' equity also contained $15,000 of additional paid-in capital and $22,000 of retained earnings. Immediately after the stock split the:

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After a 2-for-1 stock split, the number of shares doubles, so the 5,000 shares become 10,000 shares. The par value per share is halved to maintain the same total par value, so it becomes $3 per share (half of $6). The balance in the common stock account would then be 10,000 shares * $3 par value = $30,000. Choices B, C, and D are incorrect: B) The additional paid-in capital remains unchanged at $15,000, not $150,000; C) Retained earnings are not affected by a stock split, so they remain at $22,000; D) The number of shares doubles to 10,000, not halves.

At the Time That Kirby Company Issued a 2-For-1 Stock