Assume that Milo Company's Stockholders' Equity category of the balance sheet appears as follows as of January 1,2017:$\begin{array}{lr}
\text { Common stock, } \$ 15 \text { par, } 7,000 \text { shares issued and outstanding } & \$ 105,000 \
\text { Additional paid-in capital—common } & 70,000 \
\text { Retained earnings } & \underline{30,000} \
\text { Total stockholders' equity } & \underline{ \$ 205,000}
\end{array}$
Assume that Milo's common stock is selling at $35 per share on that date.
Required
What is the effect on the Stockholders' Equity section of Milo's balance sheet if the company issues a 3-for-1 stock split on January 2,2017?

Question

Assume that Milo Company's Stockholders' Equity category of the balance sheet appears as follows as of January 1,2017:$\begin{array}{lr}
\text { Common stock, } \$ 15 \text { par, } 7,000 \text { shares issued and outstanding } & \$ 105,000 \
\text { Additional paid-in capital—common } & 70,000 \
\text { Retained earnings } & \underline{30,000} \
\text { Total stockholders' equity } & \underline{ \$ 205,000}
\end{array}$ 
Assume that Milo's common stock is selling at $35 per share on that date.
Required
What is the effect on the Stockholders' Equity section of Milo's balance sheet if the company issues a 3-for-1 stock split on January 2,2017?

Quizplus · Accepted Answer

The Answer of Assume that Milo Company's Stockholders' Equity category of the balance sheet appears as follows as of January 1,2017:$\begin{array}{lr}
\text { Common stock, } \$ 15 \text { par, } 7,000 \text { shares issued and outstanding } & \$ 105,000 \
\text { Additional paid-in capital—common } & 70,000 \
\text { Retained earnings } & \underline{30,000} \
\text { Total stockholders' equity } & \underline{ \$ 205,000}
\end{array}$ 
Assume that Milo's common stock is selling at $35 per share on that date.
Required
What is the effect on the Stockholders' Equity section of Milo's balance sheet if the company issues a 3-for-1 stock split on January 2,2017?

Assume That Milo Company's Stockholders' Equity Category of the Balance