Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. After a 2-for-1 stock split, what would be the number of issued shares?

Question

Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share.  After a 2-for-1 stock split, what would be the number of issued shares?

Quizplus · Accepted Answer

After a 2-for-1 stock split, the number of issued shares would double. 
Therefore, the number of issued shares would be:
200,000 common stock shares x 2 = 400,000 shares
Preferred stock shares would remain the same at 40,000.
Total issued shares = 400,000 + 40,000 = 440,000
Therefore, the correct answer is B) 280,000.

Gordon Corporation Reported the Following Equity Section on Its Current