Element Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $20.25 per share. $$\begin{array} { | l | r | }
\hline \begin{array} { l }
\text { Common Stock, } \$ 5 \text { par, } 337,000 \text { shares authorized, } 157,000 \text { shares issued } \
\text { and outstanding }
\end{array} & \$ 785,000 \
\hline \text { Paid-In Capital in Excess of Par-Common } & 140,000 \
\hline \text { Retained Earnings } & \underline { 301,000 } \
\hline \text { Total Stockholders' Equity } & \$ 1,226,000 \
\hline
\end{array}$$ After a 2-for-1 stock split, what is the number of issued shares?

Question

Element Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $20.25 per share. $$\begin{array} { | l | r | } 
\hline \begin{array} { l } 
\text { Common Stock, } \$ 5 \text { par, } 337,000 \text { shares authorized, } 157,000 \text { shares issued } \
\text { and outstanding }
\end{array} & \$ 785,000 \
\hline \text { Paid-In Capital in Excess of Par-Common } & 140,000 \
\hline \text { Retained Earnings } & \underline { 301,000 } \
\hline \text { Total Stockholders' Equity } & \$ 1,226,000 \
\hline
\end{array}$$ After a 2-for-1 stock split, what is the number of issued shares?

Quizplus · Accepted Answer

After the 2-for-1 stock split, the number of shares outstanding will double. Therefore, the new number of issued shares will be:

Common stock: 280,000 x 2 = 560,000 shares

Additional paid-in capital: 35,000 x 2 = 70,000

Total issued shares: 560,000

Therefore, the answer is choice B.

Element Corporation Reported the Following Equity Section on Its Current