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 included $15,000 of paid in capital in excess of par value-common and $22,000 of retained earnings.Which of the following statements regarding the impact of the stock split is true?

Question

Quizplus · Accepted Answer

A stock split has no effect on the dollar amounts of assets,liabilities,and stockholders' equity.It only affects the number of shares of stock outstanding and the par value per share.The balance of the common stock account before the stock split equals $30,000 (or 5,000 shares × Par value of $6 per share).The balance of the common stock account after the stock split also equals $30,000 (or 10,000 shares × $3 per share).

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