question archive On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split
On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split
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On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend.
Common stock-$10 par value, 120,000 shares authorized, 68,000 shares insued and outstanding $ 680,000
Paid-in capital in excess of par value, common stock 290,000
Retained earnings 705,000
Total stockholders' equity $1,675,000
Assume that instead of distributing a stock dividend, Sharper did a 3-for-1 stock split. Required:
(1) Prepare the updated stockholders' equity section after the split.
(2) Compute the number of shares outstanding after the split. Complete this question by entering your answers in the tabs below.
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Solution:
Requirement 1:
| Stockholder's Equity Section | ||
| Common Stock | $680000 | (68000 shares  3/1) ($10 1/3) |
| Paid in Capital in excess of par- common stock | $290000 | |
| Retained Earnings | $705000 | |
| Total Stockholder's Equity | $1675000 |
Requirement 2:
Number of shares outstanding after the split = 68000 shares 3/1
=204000 Shares.
