A company had 300,000 shares of $10 par value common stock outstanding.The amount of additional paid-in capital is $1,500,000,and Retained Earnings is $450,000.The company issues a 2-for-1 stock split.The market price of the stock is $13.What is the balance in the Common Stock account after this issuance?
A) $6,000,000
B) $6,900,000
C) $3,000,000
D) $4,500,000

Question

Quizplus · Accepted Answer

After the 2-for-1 stock split, the number of outstanding shares will double to 600,000 shares. The par value of the common stock will decrease to $5 per share ($10/2). The balance in the Common Stock account will be:

600,000 shares x $5 par value per share = $3,000,000

A Company Had 300,000 Shares of $10 Par Value Common