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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Effect of stock split
Audrey's Restaurant Corporalion wholesales ovens and ranges to restaurants throughout the Northwest. Audrey's Restaurant Corporation, which had 50,000 shares of common stock outstanding, declared a 6-for-l stock split, a. What will be the number of shares outstanding after the split?
b. If the common stock had a market price of $540 per share before the stock split, what would be an approximate market price per share after the split?
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To determine

Concept Introduction:

Stock split:

Stock split refers to the dividing one share into two of more shares. It is usually done to make the share available for small investor with smaller value. A stock split does not affect the total stockholder's equity and it also does not require any journal entry.

Requirement-a:

To Indicate:

The number of shares after stock split

Explanation

Stock split refers to the dividing one share into two of more shares. It is usually done to make the share available for small investor with smaller value...

To determine

Concept Introduction:

Stock split:

Stock split refers to the dividing one share into two of more shares. It is usually done to make the share available for small investor with smaller value. A stock split does not affect the total stockholder's equity and it also does not require any journal entry.

Requirement-b:

To Indicate:

The approximate market price per share after stock split

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