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-Refer to Lakeshore Industries

Question 153

Multiple Choice

-Refer to Lakeshore Industries. What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share at the time the stock split is declared? A) A stock split has no impact on any of the stockholders' equity account balances. B) Total stockholders' equity increases $750,000. C) Cash increases $750,000. D) $1,500,000 of retained earnings is transferred to the capital stock accounts.
-Refer to Lakeshore Industries. What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share at the time the stock split is declared?


A) A stock split has no impact on any of the stockholders' equity account balances.
B) Total stockholders' equity increases $750,000.
C) Cash increases $750,000.
D) $1,500,000 of retained earnings is transferred to the capital stock accounts.

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