Manson World reported the following:
Common stock,$1 par,200,000 shares authorized,100,000 shares issued and outstanding
What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?
A) Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts.
B) Cash decreases $400,000.
C) Additional Paid-In Capital increases $400,000.
D) A stock split has no effect on total stockholders' equity.
Correct Answer:
Verified
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