Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share.
$$\begin{array} { | l | r | }
\hline \begin{array} { l }
\text { Common stock, \$5 par, } 100,000 \text { shares } \
\text { authorized, } 40,000 \text { shares issued }
\end{array} & \$ 200,000 \
\hline \text { Paid in capital in excess of par - common } & 120,000 \
\hline \text { Retained earnings } & \underline { 290,000 } \
\hline \text { Total stockholders' equity } & \$ \underline { 610,000 } \
\hline
\end{array}$$ Which of the following would be included in the entry to record a 2-for-1 stock split?

Question

Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share.
$$\begin{array} { | l | r | } 
\hline \begin{array} { l } 
\text { Common stock, \$5 par, } 100,000 \text { shares } \
\text { authorized, } 40,000 \text { shares issued }
\end{array} & \$ 200,000 \
\hline \text { Paid in capital in excess of par - common } & 120,000 \
\hline \text { Retained earnings } & \underline { 290,000 } \
\hline \text { Total stockholders' equity } & \$ \underline { 610,000 } \
\hline
\end{array}$$ Which of the following would be included in the entry to record a 2-for-1 stock split?

Quizplus · Accepted Answer

In a 2-for-1 stock split, the number of shares doubles while the par value per share is halved. This means the total par value remains unchanged, affecting neither the common stock account balance nor any other equity accounts directly.

Gordon Corporation Reported the Following Equity Section on Its Current