Taha Company announces a 4:1 stock split. Prior to the stock split, Taha had 1,000,000 shares of common stock outstanding and the par value was $0.20 per share. After the stock split, Taha would have: 4,000,000 outstanding shares with a par value of $0.05 per share. 250,000 outstanding shares with a par value of $0.05 per share. 250,000 outstanding shares with a par value of $0.80 per share. O 4,000,000 outstanding shares with a par value of $0.80 per share.

Taha Company announces a 4:1 stock split. Prior to the stock split, Taha had 1,000,000 shares of common stock outstanding and the par value was $0.20 per share. After the stock split, Taha would have: 4,000,000 outstanding shares with a par value of $0.05 per share. 250,000 outstanding shares with a par value of $0.05 per share. 250,000 outstanding shares with a par value of $0.80 per share. O 4,000,000 outstanding shares with a par value of $0.80 per share.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 9PA: Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000...

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Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split?
Nutritious Pet Food Companys board of directors declares a 2-for-1 stock split on June 30 when the stocks market value per share is $30. At that time, there are 10,000 shares of $1 par value common stock outstanding (none held in treasury). What is the new par value of the shares and how many shares are outstanding after the split? What is the total amount of equity before and after the split?
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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
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