On January 15, 2014, King International’s board of directors declared a 3-for-1 stock split of its $12 per value common stock, of which 3,200,000 shares were authorized and 800,000 were issued and outstanding. The market value on that date was $45 per share. On the same date, the balance of additional paid-in capital was $16,000,000, and the balance of retained earnings was $32,000,000. Prepare the stockholders’ equity section of King’s company’s balance sheet before and after the stock split. What entry, if any, is needed to record the stock split?
On January 15, 2014, King International’s board of directors declared a 3-for-1 stock split of its $12 per value common stock, of which 3,200,000 shares were authorized and 800,000 were issued and outstanding. The market value on that date was $45 per share. On the same date, the balance of additional paid-in capital was $16,000,000, and the balance of retained earnings was $32,000,000. Prepare the stockholders’ equity section of King’s company’s balance sheet before and after the stock split. What entry, if any, is needed to record the stock split?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 15, 2014, King International’s board of directors declared a 3-for-1 stock split of its $12 per value common stock, of which 3,200,000 shares were authorized and 800,000 were issued and outstanding. The market value on that date was $45 per share. On the same date, the balance of additional paid-in capital was $16,000,000, and the balance of
section of King’s company’s
Expert Solution
Step 1 King's Company Stockholder's equity before stock split
| Particulars | Amount ($) |
| Common Stock $12 par (3200000 shares authorized and 800000 issued) | 9600000 |
| Additional Paid-in-capital | 16000000 |
| Retained earnings | 32000000 |
| Total Stockholder's Equity | 57600000 |
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