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Determining the Stockholder Equity Section

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The stockholders' equity section of the balance sheet of the XYZ Corp. is as follows:

Common Stock ($5 par) $ 20,000,000
Retained Earnings $176,000,000
Total $196,000,000

Assume that the company now splits its stock 5-for-1, show the resulting stockholder's equity section.

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Solution Preview

In a stock split, the par value reduces and the number of shares increases, but there is no change in the values of the equity ...

Solution Summary

Provides steps necessary to determine the stockholder equity section.