Financial Accounting
4th Edition
ISBN: 9780134125053
Author: Kemp, Robert S., Waybright, Jeffrey.
Publisher: Pearson Education,
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Chapter 10, Problem 9SC
To determine
Explain the effect of 2-for-1 stock split.
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A 2-for-1 stock split is declared. In this case, which of the following statements is true?
A. The retained earnings fall.
B. The common stock account rises.
C. The cash account declines.
D. The par value of the common stock is reduced.
How does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share Retained Earnings Select one: to. Increase Has no effect b. Decrease Decrease c. Decrease Has no effect d. Has no effect Has no effect
The 2:1 split of shares (stock split-up):
a. increases par value per share without affecting total equity.
b. decreases par value per share and increases total equity.
c. decreases par value per share without affecting total equity.
Chapter 10 Solutions
Financial Accounting
Ch. 10 - What are the four baste rights of stockholders?Ch. 10 - Assume you are a CFO of a company that is...Ch. 10 - Prob. 3DQCh. 10 - What accounts, if any, are involved in the journal...Ch. 10 - With which type of stock would dividends in...Ch. 10 - What accounts are affected by the declaration and...Ch. 10 - What are some of the reasons for issuing a stock...Ch. 10 - Prob. 8DQCh. 10 - What could you reasonably conclude if a company...Ch. 10 - Prob. 10DQ
Ch. 10 - Prob. 1SCCh. 10 - Prob. 2SCCh. 10 - Prob. 3SCCh. 10 - Prob. 4SCCh. 10 - Prob. 5SCCh. 10 - Prob. 6SCCh. 10 - Prob. 7SCCh. 10 - Prob. 8SCCh. 10 - Prob. 9SCCh. 10 - Prob. 10SCCh. 10 - Prob. 11SCCh. 10 - Prob. 12SCCh. 10 - Stockholders' equity terminology (Learning...Ch. 10 - Stock issuance (Learning Objective 3) 5-10 min....Ch. 10 - Issuance of stock for cash and noncash assets...Ch. 10 - Prob. 4SECh. 10 - Prob. 5SECh. 10 - Prob. 6SECh. 10 - Prob. 7SECh. 10 - Prob. 8SECh. 10 - Prob. 9SECh. 10 - Prob. 10SECh. 10 - Prob. 11SECh. 10 - Prob. 12SECh. 10 - Prob. 13SECh. 10 - Prob. 14SECh. 10 - Prob. 15AECh. 10 - Prob. 16AECh. 10 - Prob. 17AECh. 10 - Prob. 18AECh. 10 - Prob. 19AECh. 10 - Prob. 20AECh. 10 - Prob. 21AECh. 10 - Accounting for cash and stock dividends (Learning...Ch. 10 - Prob. 23AECh. 10 - Prob. 24AECh. 10 - Prob. 25AECh. 10 - Accounting for treasury stock (Learning Objectives...Ch. 10 - Prob. 27AECh. 10 - Prob. 28AECh. 10 - Prob. 29AECh. 10 - Prob. 30AECh. 10 - Prob. 31BECh. 10 - Prob. 32BECh. 10 - Prob. 33BECh. 10 - Prob. 34BECh. 10 - Prob. 35BECh. 10 - Prob. 36BECh. 10 - Prob. 37BECh. 10 - Accounting for cash and stock dividends (Learning...Ch. 10 - Prob. 39BECh. 10 - Prob. 40BECh. 10 - Accounting for treasury stock (Learning Objectives...Ch. 10 - Prob. 42BECh. 10 - Prob. 43BECh. 10 - Prob. 44BECh. 10 - Prob. 45BECh. 10 - Prob. 46BECh. 10 - Prob. 47APCh. 10 - Prob. 48APCh. 10 - Prob. 49APCh. 10 - Prob. 50APCh. 10 - Prob. 51APCh. 10 - Prob. 52APCh. 10 - Prob. 53APCh. 10 - Prob. 54BPCh. 10 - Prob. 55BPCh. 10 - Prob. 56BPCh. 10 - Prob. 57BPCh. 10 - Prob. 58BPCh. 10 - Prob. 59BPCh. 10 - Prob. 60BPCh. 10 - Prob. 1CECh. 10 - Prob. 1CPCh. 10 - Prob. 1EIACh. 10 - Case 2. The board of directors for Atlantic...Ch. 10 - Prob. 1FACh. 10 - Prob. 1IACh. 10 - Prob. 1SBACh. 10 - Prob. 1WC
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- A stock split will cause a change in which of the following items? Cash Common stock The number of outstanding shares None of the abovearrow_forwardWhen a share split occurs, the aggregate par value of issued shares will change. True Falsearrow_forwardWhich of the following statements is false? Multiple Choice Both stock splits and stock dividends increase the number of common shares issued. Both stock splits and stock dividends increase the number of common shares outstanding. Stock splits reallocate amounts between retained earnings and contributed capital accounts. Both stock splits and stock dividends have the impact of reducing the market price of the stock.arrow_forward
- What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100% stock dividend or a 2-for-1 split? Assume that either action is feasible.arrow_forwardWhich of the following is not a characteristic that sets preferred stock apart from common stock? A. voting rights B. dividend payments C. transferability D. ownershiparrow_forwardWhich of the following statement is false? A -Both stock splits and stock dividends increase the number of common shares issued B- Stock splits reallocate amounts between retained earnings and contributed capital accounts C- Both stock spits and stock dividends increase the number of common shares outstanding D- Both stock splits and stock dividends have the impact of reducing the market price of the stockarrow_forward
- Stock splits and stock dividends have the following effects on Total Stockholders' Equity: Select one: a. Stock Splits DECREASE | Stock Dividends DECREASE b. Stock Splits INCREASE | Stock Dividends NO CHANGE c. Stock Splits NO CHANGE | Stock Dividends DECREASE d. Stock Splits NO CHANGE | Stock Dividends NO CHANGEarrow_forwardWhat is a stock split? How does a stock split affect the market value of a share of stock? What is a stock spin-off? In very general terms, explain how a stock spin-off works.arrow_forwardstock splits are similar to stock dividends in that both reduce retained earnings and have no effect on par true falsearrow_forward
- In a stock split, zero basis is allocated to the new shares. True or Falsearrow_forwardThe primary purpose of a stock split is to a. reduce the market price of the stock per share. b. increase paid-in capital. c. increase retained earnings. d. increase the market price of the stock per share.arrow_forwardWhen computing diluted earnings per share, which of the following will not be considered in the calculation? O Dividends paid on common stock. O The weighted average common shares. O The effect of stock splits. O The number of convertible bondsarrow_forward
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