a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is S (Round to the nearest dollar.)

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 69E: Stock Dividends Crystal Corporation has the following information regarding its common stock: S10...
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Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The
current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings.
Options
$ 1,000,000
720,000
1,700,000
10,000,000
Preferred stock
Common stock (120,000 shares at $6 par)
Paid-in capital in excess of par
Retained earnings
Total stockholders' equity
$13,420,000
a. What effect on Mammoth's equity account would result from the stock split?
b. What change in stock price would you expect to result from the stock split?
a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is S
(Round to the nearest dollar.)
Enter your answer in the answer box and then click Check Answer.
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Transcribed Image Text:ome Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. Options $ 1,000,000 720,000 1,700,000 10,000,000 Preferred stock Common stock (120,000 shares at $6 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $13,420,000 a. What effect on Mammoth's equity account would result from the stock split? b. What change in stock price would you expect to result from the stock split? a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is S (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. 16 parts remaining Check Answer Clear All P Type here to search
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