On July 1, 2021, Luke Corp. has 200,000 shares of P100 par common stock outstanding and the market price of the stock is P120 per share. On the same date, Luke declared a 1-for-2 reverse stock split. The par of the stock was increased from P100 to P200 and one new P200 par share was issued for each two P100 par shares outstanding. Immediately before the 1-for-2 reverse stock split, Luke' additional paid-in-capital was P7,500,000. What should be the balance in Lucas' additional paid-in capital account immediately after the reverse stock split is effected?

On July 1, 2021, Luke Corp. has 200,000 shares of P100 par common stock outstanding and the market price of the stock is P120 per share. On the same date, Luke declared a 1-for-2 reverse stock split. The par of the stock was increased from P100 to P200 and one new P200 par share was issued for each two P100 par shares outstanding. Immediately before the 1-for-2 reverse stock split, Luke' additional paid-in-capital was P7,500,000. What should be the balance in Lucas' additional paid-in capital account immediately after the reverse stock split is effected?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 28E

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