Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share. $$\begin{array} { | l | r | }
\hline \text { Common stock, } \$ 5 \text { par, } 190,000 \text { shares authorized, } & \
1140,000 \text { shares issued } & \$ 700,000 \
\hline \text { Paid-in capital in excess of par-Common } & 120,000 \
\hline \text { Retained earnings } & \underline { 290,000 } \
\hline \text { Total stockholders' equity } & \$ 1,110,000 \
\hline
\end{array}$$ 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. $$\begin{array} { | l | r | } 
\hline \text { Common stock, } \$ 5 \text { par, } 190,000 \text { shares authorized, } & \
1140,000 \text { shares issued } & \$ 700,000 \
\hline \text { Paid-in capital in excess of par-Common } & 120,000 \
\hline \text { Retained earnings } & \underline { 290,000 } \
\hline \text { Total stockholders' equity } & \$ 1,110,000 \
\hline
\end{array}$$ After a 2-for-1 stock split, what would be the number of issued shares?

Quizplus · Accepted Answer

A 2-for-1 stock split doubles the number of shares outstanding. Therefore, the number of issued shares would increase from 1,140,000 to 2,280,000 (1,140,000 x 2).

Gordon Corporation Reported the Following Equity Section on Its Current