Pettygrove Company had 1,800,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $

Question

3 years ago

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Pettygrove Company had 1,800,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $

9,000,000, and Retained Earnings is $2,700,000. The company issues a 2-for-1 stock split. The market price of the stock is $12. What is the balance in the Common Stock account after this issuance

Business

1 answer:

Natasha_Volkova [10] · Answer 1 · 2022-03-10T00:18:18+03:00

Answer:

$18,000,000

Explanation:

The computation of the balance in the common stock after the issuance is shown below

Before the stock split:

Common stock account balance = Shares issued × Par value per share

= 1,800,000 × $10

= $18,000,000

After the stock split:

Common stock account balance = $18,000,000

As Stock Split up does not change the balance of any account so it would remain unchanged