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Chapter 13: Q31E (page 715)

Reporting stockholders’ equity after a stock split

Wood Golf Club Corp. had the following stockholders’ equity at December 31, 2017:

Common Stock—\(1 Par Value; 650 sharesauthorized, 270 shares issued and outstanding

Paid-In Capital:

2,600

\) 270

810

Retained Earnings

Total Stockholders’ Equity $ 3,410

Stockholders’ Equity

Paid-In Capital in Excess of Par—Common 540

Total Paid-In Capital

On June 30, 2018, Wood Golf Club split its common stock 2-for-1. Prepare the stockholders’ equity section of the balance sheet immediately after the split. Assume the balance in retained earnings is unchanged from December 31, 2017.

Short Answer

Expert verified

Total shareholders’ equity of the company is $3,410

Step by step solution

01

Basic Introduction

NumberofSharesPost-Split=NumberofShares×StockSplit=270×2=540

StockPricePost-Split=StockPriceBeforeStockSplitStockSplit=$12=$0.5

02

Balance sheet (Partial)

Balance sheet (Partial)

Dec 31, 2017

Shareholders’ Equity

Common Stock—$0.5 Par Value; 650 shares authorized, 540shares issued andoutstanding

$270

Paid-In Capital in Excess of Par—Common

$540

$810

Retained Earnings

$2,600

Total Stockholders’ Equity

$3,410

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Most popular questions from this chapter

On January 3, Halsall Corporation purchased 2,000 shares of the company’s \(2 par value common stock as treasury stock, paying cash of \)8 per share. On January 30, Halsall sold 1,200 shares of the treasury stock for cash of $10 per share. Journalize these transactions.

What account is used to record the premium when issuing common stock? What type of account is this?

Question: Organizing a corporation and issuing stock

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