Pettygrove Company had 600,000 shares of $10 par value common stock outstanding.The amount of additional paid-in capital is $3,000,000,and Retained Earnings is $900,000.The company issues a 2-for-1 stock split.The market price of the stock is $26.What is the balance in the Common Stock account after this issuance?
A)$12,000,000
B)$13,800,000
C)$6,000,000
D)$9,000,000

Question

Quizplus · Accepted Answer

Stock splits involve a decrease in the par value per share offset by an increase in the number of shares outstanding.Before the stock split,the company has 600,000 shares of $10 par value stock which is $6,000,000.After the stock split,the company has 1,200,000 shares of $5 par value common stock which is still $6,000,000.

Pettygrove Company Had 600,000 Shares of $10 Par Value Common