26) On January 1, 2013, Parquet Sales issued 40,000 shares of common stock at a price of $22 per share. The stock has a par value of $1.00 per share. In mid-2014, due to dramatic increases in profits, the stock reached a market value of $90 per share. The board of directors approved a 2-for-1 stock split. After the stock split, what will the balance sheet show as the par value of common stock?
A) $2.00
B) $1.50
C) $1.00
D) $0.50
27) On January 1, 2013, Parquet Sales issued 40,000 shares of common stock at a price of $22 per share. The stock has a par value of $1.00 per share. In mid-2014, due to dramatic increases in profits, the stock reached a market value of $90 per share. The board of directors approved a 2-for-1 stock split. After the stock split, what will the market value of the stock be?
A) $45.00 per share
B) $44.00 per share
C) $135.00 per share
D) $0.50 per share
28) Which of the following actions will increase the balance in the Common stock account?
A) Cash dividend
B) Stock split
C) Stock dividend
D) Purchase of treasury stock
29) Which of the following actions could increase the balance in the Paid-in capital in excess of par account?
A) Cash dividend
B) Stock split
C) Stock dividend
D) Purchase of treasury stock
30) Which of the following will decrease the balance in Retained earnings?
A) Repayment of bond principal
B) Stock split
C) Stock dividend
D) Purchase of treasury stock
31) Which of the following will decrease the balance in Retained earnings?
A) Cash dividend
B) Stock split
C) Purchase of long-term assets
D) Purchase of treasury stock
32) Which of the following will decrease the amount of Total stockholders' equity?
A) Cash dividend
B) Stock split
C) Stock dividend
D) Repayment of bond principal
33) Which of the following will decrease the amount of Total stockholders' equity?
A) Purchase of treasury stock
B) Stock split
C) Stock dividend
D) Repayment of bond principal
34) On July 31, 2013, the Archer Company reported the following information in the equity section of their balance sheet:
Stockholders' equity
|
|
Common stock, $1.00 par, 500,000 shares authorized, 20,000 shares issued
|
$20,000
|
Paid-in capital in excess of par
|
1,180,000
|
Retained earnings
|
3,200,000
|
Total stockholder's equity
|
$4,400,000
|
Assume that Archer carries out a 2-for-1 stock split. Please prepare a similar equity section showing the effects of the stock split.