Forward Stock Split On March 1 of the current year, Sentry Corporation has 460,0
ID: 2547873 • Letter: F
Question
Forward Stock Split
On March 1 of the current year, Sentry Corporation has 460,000 shares of $22 par value common stock that are issued and outstanding. The general ledger shows the following account balances relating to the common stock:
On March 2, Sentry Corporation splits its stock 2-for-1 and reduces the par value to $11 per share.
a. How many shares of common stock are issued and outstanding immediately following the stock split?
Answershares
b. What is the balance in the Common Stock account immediately following the stock split?
$Answer
c. What is the balance in the Paid-in Capital in Excess of Par Value account immediately following the stock split?
$Answer
Explanation / Answer
a) Common stock issued and outstanding immediately following the stok split = 460000*2 = 920000 shares
b) Balance in the common stock account immediately following the stock split = 920000*11 = 10120000
c) Paid in capital in excess of par value immediately following the stock split = 4000000